Port Tracker report continues strong run of U.S. retail container import growth

The most recent edition of the Port Tracker report issued today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates points to a healthy month for imports in a 2017 that has seen five of the seven highest-volume import months on record.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and Fort Lauderdale, Fla.-based Port Everglades. Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

For October, the most recent month for which data is available U.S.-based retail container ports covered in the report handled 1.77 million TEU (Twenty-Foot Equivalent Units). This was 0.3% ahead of September’s 1.76 million TEU and below August’s 1.8 million TEU, which is the highest-volume import month recorded since the NRF started tracking imports in 2000 and tops the previous record set one month earlier in July of 1.78 million TEU. Prior to July and August, the previous high was 1.73 million TEU from March 2015.

Compared to October 2016, this past October was up 5.9% annually.

“Retailers are doing last-minute restocking as consumers head toward the finish line of the shopping season, but the majority of holiday merchandise is already in the country and ports are beginning to quiet down,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “With tax cuts that will leave more money in shoppers’ pockets in the headlines and consumer confidence high, all signs are that this has been a strong holiday season.”

Gold also stressed that currently strong market environment could be hindered should retailers be negatively impacted by the United States were to exit the North American Free Trade Agreement (NAFTA) or were to engage in forms of anti-trade policy that does not recognize the increased employment and other contributions imports make to the nation’s economy. And he noted that even through the White House continues to talk about taking protectionist trade measures, concerns remain about what may in store for 2018 and beyond as well.

Port Tracker expects November to down 0.3% annually at 1.64 million TEU, with December pegged at 1.6 million TEU for a 1.5% annual gain. The total 2017 tally is pegged at 20 million TEU, which would set a new annual record and come in ahead of 2016’s 18.8 million TEU by 6.4%, as well as be in line with the 3.1% increase from 2015 to 2016. Looking into 2018, January is expected to be down 0.5% at 1.67 million TEU, and February and March, which are typically both impacted by the Lunar New Year are expected to be up 11.6% and down 2% at 1.6 million TEU and 1.5 million TEU, respectively.

NRF recently came out with an updated forecast indicating that 2017 retail sales are expected to be up between 3.2%-3.8%, with 2017 holiday sales, which are comprised of retail sales for November and December, expected to be up between 3.6%-4%.

Hackett Associates Founder Ben Hackett wrote in the report that things are in a good spot as 2017 comes to a close, with total volumes estimated to be up by nearly 7%.  What’s more, he said that a new trend in coastal market shares is taking effect, with East Coast ports coming in ahead of West Coast ports, with a projected growth of 7.5%.

“The total business inventory-to-sales ratio peaked in the February-to-May period but then declined, reversing an upward trend that began in August 2014,” wrote Hackett. “We have also seen an explosion in e-commerce retail sales as a percentage of total sales, which we believe to be the cause of the increased inventories as consumers demand instant gratification. That is the good news and we expect the coming six months to continue to grow, although at a reduced rate on a year-on-year basis. The second half of 2018 will be weaker than the first half, but recession is not on the horizon.”