Near-record volumes are in the cards in the coming months, says Port Tracker Report

Even with a fresh round of tariffs set to kick in on September 1, imports at United States-bound retail container ports are pegged to come in at near-record levels through the remainder of 2019, according to the most recent edition of the Port Tracker report published this week by the National Retail Federation (NRF) and Hackett Associates.

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, Jacksonville, 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.

“Even with virtually everything American imports from China soon to be subject to tariffs, it isn’t quick or easy for retailers to change their supply chains,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “That means American families are ultimately going to pay more for goods they can’t do without. And even if sourcing eventually shifts away from China, it will simply come from other countries. It’s time to stop punishing American businesses, workers and families for China’s wrongdoing.” 

What’s more, the report noted that with the President Trump recently announcing, via Twitter, that 10% tariffs on an additional $300 billion in Chinese goods will go into effect on September 1, in addition to tariffs of 25% levies on $250 billion in U.S.-bound imports over the last year, equates to a tax on nearly all goods the U.S. imports from China. And it added that U.S. importers paid $6 billion in June tariffs, representing on of the highest tariff months ever and a 74% annual increase.

U.S. ports covered in the report handled 1.8 million Twenty-Foot Equivalent Units (TEU) in June, the most recent month for which after-the-fact numbers are available, marking a 2.9% decline from May and a 3% annual decline.

The report indicated July and August, are projected to hit 1.86 million TEU (a 2.6% annual decrease) and 1.91 million TEU (a 0.6% annual increase), respectively, with September at 1.85 million TEU (a 1.1% annual decrease), October at 1.91 million TEU (a 6.2% annual decrease), November at 1.84 million TEU (a 1.8% annual increase), and December at 1.81 million TEU (a 7.9% annual decrease).

If the July and August numbers come to fruition, the report said that they would represent the highest monthly volume tallies since December 2018’s 1.96 million TEU, slightly trailing the all-time high of 2 billion TEU from October 2018. The report observed that even though imports will be down annually for most months over the balance of 2019, it is attributed to high volumes from 2018, due to retailers importing more in advance of scheduled tariff hikes and, in turn, making annual comparisons challenging.

According to Port Tracker, the first half of 2019 came in at 10.5 million TEU, for 2.1% annual gain, with 2019 forecasted to hit 21.7 million TEU, which would be within 0.4% of the record 21.8 million TEU, set in 2018, which marked what the report called an “unusually high” 6.2 annual gain over 2017.

Hackett Associates Founder Ben Hackett wrote in the report that the recent announcement regarding the 10% tariff hike will not help the import situation.

“We do not believe that it will have a major impact, if it is applied at all, but it will be felt and the announcement was clearly of concern to retailers,” he said. “A jump to 25 percent, if announced, would have a significant impact and would cause us to lower our trade projections further. Given the above we believe that imports will weaken in the second half of the year. Our overall outlook is more pessimistic than last month, underlining that trade wars are not harbingers of good things to come.”