Ongoing impact of tariffs expected to remain intact for U.S. import volumes, says Port Tracker

A final tariff push set to take effect in December is pegged to result in another month of increased import activity for United States-based retail container ports, according to the most recent edition of the Port Tracker Report, which was issued late last week by the National Retail Federation (NRF) and maritime consultancy 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.

Not surprisingly, the ongoing “trade war” and related ongoing tension between the U.S. and China remains a focal point of the report’s findings, in the wake of President Trump recently announcing a tentative agreement on a partial trade deal with China in October, the report noted, with the caveat that officials are currently working in the details of the agreement and no date of location for the measure to be signed having been issued at this point. It added that an October tariff increase was canceled and news reports last week indicated that some tariffs could be removed, but there has been no word on a new round of tariffs on consumer goods currently scheduled to take effect December 15.

“Retailers are highly competitive, but the ability to compete has been challenging this year because of the uncertainty of the trade war and continued tariff escalation,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Retailers are encouraged by reports that China and the United States have agreed to remove at least some of the existing tariffs once a ‘phase one’ deal is signed. We are eager to see concrete evidence that the trade war is coming to an end with a final deal that removes all tariffs.”

U.S. ports covered in the report handled 1.87 million Twenty-Foot Equivalent Units (TEU) in September, the most recent month for which data is available, which is up 0.2% annually and down 4.7% compared to August. August’s 1.97 million TEU represents the second-highest month on record, the report said, which came in advance of tariffs that went into effect on September 1.

Port Tracker said that October is pegged to come in at 1.93 million TEU, for a 5.2% decrease off of October 2018’s record 2 million TEU, and November is expected to be up 8.3% to 1.96 million TEU, which, if it comes to fruition, would match December 2018 and July 2019 for the third highest monthly tally on record. As for December, Port Tracker said that imports are expected to see a 9.2% decrease to 1.78 million TEU, in comparison to near record volumes in December 2018, which was up due to scheduled tariffs that were eventually postponed. And the projected decline in December, the report said, will come as the December tariffs go into effect, with December typically being a lower volume month for imports, as most holiday merchandise has arrived at U.S. ports by then.

For all of 2019, the report said it expects it to be a record year, with imports up 1% to 22 million TEU.

Looking ahead to 2020, January is expected to hit 1.85 million TEU, for a 2.3% annual decrease. And February, which is typically the slowest month of the year due to the timing of the Lunar New Year and factory shutdowns in Asia, is slotted to be down 2.1% to 1.59 million TEU.

“Industry planning is in a state of confusion with the on-again, off-again tariff increases and the widening of trade disputes,” Hackett Associates Founder Ben Hackett wrote in the report. “Where is all of this leading us? As long as consumer spending remains relatively stable, economic growth – despite being weaker – will keep the country on track for the next year.”

Hackett added that should current consumer spending levels remain on track, coupled with economic growth, despite being weaker, are expected to keep “the country on track for the next year,” while adding it comes at a cost, in the form of federal government spending and the national debt reaching new levels, a situation he described as a crisis in waiting.