The Red Sea crisis hits the global supply chain, and the US West Coast imports may plummet

It is learned that according to the latest monthly "Global Port Tracking" report released by the National Retail Federation (NRF) and Hackett Associates, the global supply chain has once again been hit by the Red Sea crisis, and US imported goods are facing delays and a sharp increase in transportation costs.

The report also pointed out that as the holiday shopping season ends, import cargo volumes at major U.S. container ports will gradually slow in the first quarter of 2024 and then recover in the spring.

Jonathan Gold, vice president of supply chain and customs policy at NRF, said that the first quarter is the off-season each year and ports usually have a period of rest, but the attacks on ships in the Red Sea have brought new challenges to the supply chain. Retailers are working with their shipping partners to develop strategies to minimize the impact, but the resulting longer shipping times and increased costs still exist.

Ben Hackett, founder of Hackett Associates, pointed out that the Red Sea crisis could have a huge impact on U.S. East Coast ports because most of the goods shipped from Asia to the East Coast need to pass through the Pacific Ocean and the Panama Canal, but pass through the Red Sea before crossing the Atlantic Ocean. In order to avoid attacks, some carriers have to detour around the Cape of Good Hope, which adds five to six days to the sailing time. Some retailers even reported delays of up to two weeks.

Ben Hackett added: “For some time to come, more and more Asian goods will arrive at West Coast ports and then be shipped to the East Coast by rail, but this is expensive and does not save much time.

Data shows that in November 2023, container imports at major US ports reached 1.89 million TEUs (20-foot equivalent units), down 8% from October. However, compared with the same period last year, imports in November increased by 6.6%. October (2.06 million TEUs, up 6.6% year-on-year) is the busiest month for US ports and the peak of the autumn shipping season.

Ports have not yet reported December data, but Global Port Tracker forecasts that imports in December will reach 1.89 million TEU, up 9% year-over-year. U.S. imports for the full year 2023 will reach 22.3 million TEU, down 12.8% from 2022 (25.5 million TEU) and 1.3% from 2021 (25.8 million TEU). February imports will be the lowest month in 2024 due to Asian factory shutdowns during the Lunar New Year.

Editor ✎ Nicole/

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