The dark clouds on the horizon for US import container demand are not yet visible from the Port of Virginia, which set another monthly cargo record in May. Total container volume for the month was up 8% year-on-year to 340,119 TEU. Loaded import boxes were up 15.2% to 166,918 TEU while loaded export containers were down 2% to 97,760 TEU.

The port picked up two new services in May: Wan Hai Lines added a Virginia call to its weekly AA7 service from Asia to the US East Coast through the Suez; and Singapore-based Sea Lead began its first-ever service to the US East Coast with Virginia being the carrier’s first port call.

“May’s TEU total surpassed the previous all-time monthly volume mark by more than 14,500 units; that record was set in December 2021”, the port said. “Additionally, May was the third consecutive month of TEU volumes exceeding 314,000 units. The combined volume of March, April and May is more than 978,000 TEUs, resulting in the busiest three-month stretch in port history.”

Stephen A. Edwards, CEO and executive director of the Virginia Port Authority, is expecting strong volumes in June that will position the port to have its best fiscal year (FY2022, running 1 July 2021 to 30 June 2022) performance on record. He noted the timing of new equipment arrivals including 15 new straddle carriers and two new STS cranes will be important to a strong finish in FY22.

“The success we have had in these last three months is the result of an experienced operations team that understands how to extract maximum productivity from the terminals while delivering very efficient service to our customers,” Edwards said. “These new cranes will provide the capacity to process about 360,000 additional TEUs annually, which is going to be important for us as we continue to see new business and move into peak cargo season. This best-in-class productivity and our $1.3 billion long-term investment strategy is driving business to The Port of Virginia.”

US West Coast ports have not yet reported their numbers for May. However, they are very unlikely to show growth as strong as Virginia, as nervous shippers make greater US of East Coast ports while the ILWU contract negotiations are underway.

Looking ahead for the rest of 2022 beyond June, dark clouds are on the horizon for the whole US market. Inflation and high gas prices have dampened consumer spending, and some leading retailers including Target have built up too much inventory in categories including household goods, furniture and appliances.

After a disappointing Q1 Target this week announced it plans to “right-size” its inventory in Q2 2022 through steps that include “removing excess inventory and canceling orders. The action plan also includes the addition of incremental holding capacity near U.S. ports to add flexibility and speed in the portions of the supply chain most affected by external volatility; pricing actions to address the impact of unusually high transportation and fuel costs; and working with suppliers to shorten distances and lead times in the supply chain.”

The plan will see Target clear space in its stores for groceries, household essentials and beauty items by reducing inventories of electronics, appliances, and homewares. As this plays out the cubic capacity of Target’s cargo requirements will decrease significantly. Import demand is also expected to fall as consumer spending shifts from goods to services.