U.S. shippers and their shipping partners should not be too confident in the talk of a rebound in freight demand in the second half of the year. Indicators such as manufacturing output and industry-specific wholesale and retail inventory-to-sales ratios show few signs of a rapid recovery in U.S. freight traffic.
despite better-than-expected manufacturing output in January, the manufacturing leaders that unleash shipping demand are not turning fast enough and retail inventories remain high. This suggests that the flow of goods on U.S. transportation lines will be much weaker later in 2023 than many would like to see.
Global Port Tracker predicts that imports will be 1.76 million TEUs in March 2023, down 24.8 per cent year-on-year; 1.87 million TEUs in April, down 17.3 per cent year-on-year; 1.92 million TEUs in May, down 19.9 per cent year-on-year; and 2 million TEUs in June, the first time since October 2022 that imports are expected to be so high, but it was still down 11.3 percent year-on-year.
One thing that could change this trend is the strengthening of housing demand and new home construction, said Jason Miller, an analyst at Business Magazine. However, the U.S. Census Bureau said Thursday that privately owned housing declined 4.5 percent from December and 21.4 percent year-over-year, continuing a downward trend that began a year ago.
on imports, the National Retail Federation (National Retail Federation) believes that "February is usually a slow season, but this year will be the lowest data we have seen in nearly three years. Retailers are being cautious as they wait to see how the economy responds to efforts to control inflation." As the economy slows and consumers cut back on spending on goods, U.S. imports will fall nearly 20 percent by the first half of 2023 from a year earlier.
to inventory delay
data released Wednesday by the U.S. Census Bureau showed that the seasonally adjusted retail inventory-to-sales ratio was 1.26 in December, compared with 1.42 in December 2019. The unadjusted rate was even lower at 1.12, reflecting the normal drawdown in inventories ahead of the November holiday.
, however, the overall, across-the-board retail inventory ratio includes industries where inventories are still historically low, such as auto and parts retailers.
this tends to distort the overall picture. The ratio of car inventories to sales was 1.61 in December, meaning it would take 1.61 months to clear inventory. This compares with a rate of 1.32 in December 2021 and 2.22 in December 2019. In contrast, the construction materials and garden supplies retailer's inventory-to-sales ratio was 1.97 in December, compared with 1.80 in the previous year and 1.82 in December 2019. The rate for furniture and household goods retailers was 1.98 in December, down from last June's 2.08, but still higher than 1.86 in December 2021 and 1.60 in December 2019.
Debbie Hancock (Debbie Hancock), vice president of investor relations at Hasbro, told Wall Street analysts on an earnings call on Thursday: "At the end of the year, our inventory level was $0.168 billion lower than in the third quarter, but it was $0.125 billion higher than last year, an increase of 23%."
The decline in manufacturing
manufacturing output rose 1 percent in January from December, according to the Federal Reserve, but the increase was based on a revised lower base in December and did not reverse the overall decline. That's important because industrial products account for about 58 percent of all truckloads of ton-miles in the United States, according to the U.S. Census Bureau's Commodity Flow Survey.
the decline in freight traffic, the economy is in the midst of falling employment and rising wages, while high inflation and rising interest rates are also threatening a recession.
"Business Daily" parent company S & P Global (S & P Global) and the Institute of Supply Management (ISM) related data show that the US manufacturing industry has shrunk further. The S & P Global Purchasing Managers' Index came in at 46.9 in January, slightly above December's 46.2, but still below 50, the lowest reading to indicate manufacturing expansion. The ISM purchasing managers' index came in at 47.4 in January, up from December's 48.4 and showing signs of a deepening economic contraction.
S & P Global Market Intelligence (S & P Global Market Intelligence) said in a statement on the February PMI report that the US "production has fallen for three consecutive months, indicating a significant decline in output, which is becoming more and more obvious in official statistics."
Chemical rail shipments have fallen since September and remained flat YoY in 2022, according to AAR. Notably, paper production in the United States fell to its lowest point in decades in December, according to the Federal Reserve.
"There's no question we're in the middle of a freight recession," said Jason Miller, an analyst at's Business Journal." Miller disagrees with the assertion that freight will decline in early 2022. "We absolutely are. We 've had two quarters of seasonally adjusted demand declines." This is bad news. The good news is "we're probably already at the bottom," he said, but added: "The question is how long we'll stay at the bottom."
Forwardernet.com