June 3, 2023

Tracking back-to-school orders: How do they stack up?


Container trade is providing keen insight into retailer expectations of the consumer for this back-to-school season. 

Depending on the product category, logistics orders are flat or slightly up, American Shipper recently reported. But what about the basics? 

There are some things parents need to buy for their kids when they go back to school. If you want to gauge the level of consumer optimism, you can analyze the volumes of back-to-school staples such as paper notebooks, backpacks and lunch boxes. Based on these items, you can see what kind of demand retailers anticipate.

To get an idea on demand, American Shipper asked ImportGenius to dive into the containers. The company reviewed the import volumes in three product categories: paper notebooks, backpacks and lunch boxes. The time frame — 2019-2023 — shows the “normal” trend and the impact of COVID and the reopening of the country; 2022 shows the surge when schools reopened for in-person education across the nation.

“We can clearly see that May is at or near the peak of yearly imports for all three categories,” said William George, director of research for ImportGenius. “The impact of COVID can be clearly seen on backpack and lunch box imports. Notebook imports, on the other hand, did not diminish, showing notebooks remained important for virtual learning.”

Coming off a surge, especially something that has not happened in recent history like reopening after a pandemic, is tough for any apples-to-apples container comparison. Adding to the difficulty in this analysis is the impact of rising interest rates, inflation and the threat of a recession.

“While this May’s import volumes in all three categories are above those in 2020 and 2021, they are all below 2022’s peaks,” George said. “This is suggesting that retailers are preparing for a small contraction in consumer spending.”

Comparing today’s “new pandemic normal” to the “pre-pandemic normal,” imports of lunch boxes and notebooks are higher. According to the data supplied by ImportGenius, Dollar General is the current largest importer of notebooks, with at least 247 twenty-foot equivalent units in 2023. However, backpack orders are down compared to 2019. 

Could it be that parents purchased new backpacks for their kids in 2022 and are having their kids reuse them because they would rather use that discretionary income on other products? Possibly. Backpacks are higher-priced items, and if you are looking to save some dollars here and there as a parent, reusing a backpack makes sense.

Bottom line: The retailers are still recovering from their hangover in inventory glut, and they do not want to find themselves holding items again in their warehouses.

In a note to clients, shipping company HLS Transpacific framed its outlook on the present situation based on what it is seeing from shippers.

“There is still no significant uptick observed in export volume from China and also Asia. Given the increasing uncertainty about the economy and consumer confidence in the U.S., the traditional peak season that starts mid-summer for the holidays is more likely to be later, shorter and weaker this year. It is reported that the big retailers such as Home Depot, Target and Walmart have finally brought inventory back to 2019 levels. However, with the expectation of slow sales in the coming months, retailers have lowered their market outlooks and not prepared to build a full restocking.”

So if you want to be at the head of the class for the remainder of this year, it really all goes back to keeping tabs on orders and container volume. By doing this, you will not be left surprised by any pullbacks. Remember, containers are a physical reminder of demand, and the consumer is still digesting after two years of intense spending.

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