Consumer Demand is Expected to Remain Strong in the First Half of 2022
It is expected that volumes of continued consumer demand will remain strong for the first half of the year, at minimum, and has the potential to lead to more port congestion and supply chain disruptions.
What the Numbers Show
To begin 2022, retail imports were at solid year-over-year increases. U.S. ports had a little over 5 percent year-over-year volume increase in January 2022. Some speculate this increase was in anticipation to move products before Chinese New Year began the following month. In February, the National Retail Federation (NRF) report showed that it increased year-over-year by 10.5 percent, then followed by a 4.5 percent decline in March, the Journal of Commerce reported. Retail sales are also expected to increase in 2022, with consumers ready and having the resources to spend, as the supply chain slowly works to keep up with consumer demand.
For the first half of 2022, NRF is predicting that imports will rise by almost 2.5% year-over-year. In addition, throughout the individual months of the second quarter this year, NFR sees volumes increasing between 3 to more than 4 percent, reported the Maritime Executive.
Challenges at the Ports
There have been many challenges at ports throughout the first three months of 2022. Ben Hackett, founder of the firm that produces the data for the NRF, told Maritime Executive that, “the main challenge at the ports continues to be the clearing of import containers to their inland destinations, as export containers still are being held back because of the lack of space at the terminals.”
With strong consumer demand, ports will be faced with continued congestion and backlogs for getting containers inland to their destination. The congestion, backlogs and the uncertainty surrounding the longshore labor talks out in the USWC are all on the minds of retailers all over, and something they are planning for.
E-Commerce Seeing Success
E-commerce has been seeing success, especially with electronics, groceries, and apparel. These three alone make up nearly 42 percent of e-commerce sales.
Online groceries have had an exceptionally great couple of years throughout the pandemic. It rose 103 percent year-over-year in 2020, then jumping up 7.2 percent in 2021, making up for nearly 9 percent of the e-commerce market, Freight Waves reports.
Electronics continues to dominate as the largest e-commerce category with nearly 19 percent of the overall e-commerce market, in addition to being up 8 percent year-over-year in 2021, reports show.
Apparel remains the third largest e-commerce category and maintains a little over 14.3 percent of e-commerce sales, but remains at 8 percent year-over-year growth in 2021, reports show.
The numbers are proving consumer demand will remain strong throughout the first half of 2022, as e-commerce continues to see success despite the challenges at the ports continuing for the foreseeable future. It will be interesting to see how strong consumer demand remains at the end of the first half and into the beginning of the second half of the year.
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