This summer, U.S. retailers have ramped up imports in anticipation of potential strikes by port workers and ongoing shipping disruptions caused by the Red Sea attacks. They are eager to stock up on holiday merchandise before the shortened holiday shopping season.

In July, container imports and shipping rates surged, signaling an earlier-than-usual peak season for the shipping industry, which handles about 80% of global trade.

July is expected to be the peak sales month for U.S. retailers, accounting for roughly half of U.S. trade, with August expected to be equally strong.

Companies importing toys, home goods, and consumer electronics have launched holiday promotions early to capture the attention of shoppers who like to prepare in advance. "Retailers don't want to be caught off guard," said Jonathan Gold, Vice President of Supply Chain and Customs Policy at the National Retail Federation (NRF).

Peter Sand, Chief Analyst at pricing platform Xeneta, noted that many shippers accelerated their holiday orders, with some sending Christmas goods as early as May.

Experts have pointed out that this surge in U.S. imports is not due to increased consumer spending, which has been constrained by stubborn inflation and high interest rates. Instead, it is driven by concerns over potential strikes at U.S. ports and the fact that Thanksgiving will fall later this year, on November 28, squeezing the crucial holiday shopping and shipping season leading up to Christmas.

According to data from Descartes Systems Group, a supply chain software provider, U.S. container imports in July hit the third-highest monthly record, reaching 2.6 million twenty-foot equivalent units (TEUs), a 16.8% year-on-year increase. This surge was partly driven by record imports from China.

The NRF, whose executive board includes the CEOs of Walmart U.S., Target, Macy's, and Saks, expects strong import growth in August as well. Walmart, the largest U.S. container importer, is set to release its second-quarter results on August 15.

After negotiations between the International Longshoremen’s Association and the U.S. Maritime Alliance reached a deadlock, retailers are concerned about a potential strike at ports from Maine to Texas starting October 1.

Maersk outlined the potential consequences of a U.S. port strike last Friday.

“If a full-scale work stoppage occurs at U.S. Gulf and East Coast ports, even a one-week strike could take four to six weeks to recover, with significant backlogs and delays compounding over time,” Maersk stated in its U.S. market update.

Data from Xeneta revealed that spot container shipping rates from the Far East to the U.S. West Coast rose by 144% between late April and early July, though they have since fallen by 17%. Similar trends were observed on container routes to the U.S. East Coast, Northern Europe, and the Mediterranean.

“We should see further declines in the spot market now, but the drop is unlikely to be as fast as the rise,” said Sand. “It will still be a painful end to the year for shippers.”

Tariff Threats

The industrial sector has been a key driver of U.S. container import growth in the first half of 2024, partly due to upcoming tariffs on export products from China and other countries. The Biden administration has imposed new tariffs on a range of goods, set to take effect later this year.

Jason Miller, a supply chain management professor at Michigan State University, noted that tariffs will hit electric vehicle batteries and solar cells the hardest.

President Biden has maintained the tariff policies set by his predecessor, Donald Trump. As a 2024 Republican presidential candidate, Trump has threatened to impose more and higher tariffs if he returns to office. However, according to Miller, corporate responses to these threats have been muted so far.

Global shipping giant Maersk suggested that demand may increase ahead of the U.S. election in November due to tariff uncertainty.

“There seems to be a consensus that the U.S. and China have entered a more competitive relationship, regardless of who wins the election,” said Maersk CEO Vincent Clerc earlier this week.

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