Port Tracker report looks at projected positive growth

Keeping in line with last month, the May edition of the Port Tracker report from the National Retail Federation (NRF) and maritime consultancy Hackett Associates is calling for steady gains for United States-bound retail container traffic in the coming months.

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.

“Regardless of whether the sales come in their stores or through their websites, retailers see that consumers are buying more this year and they’re importing the goods needed to meet the demand,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “With unemployment at its lowest level in a decade and the economy adding jobs, retailers expect shoppers to continue to increase their spending.”

For March, the most recent month for which data is available, port covered in the report handled 1.53 million TEU (Twenty-Foot Equivalent Units), which marked a 6.8% increase over February, a month that is often impacted by the Lunar New Year and many factories are closed, and up 15.8% annually over what the report called “unusually low numbers” during March 2016, when the Lunar New Year arrived a week later.

April is pegged at 1.56 million TEU for an 8.3% annual increase, and May is expected to be up 2.6% annually. June is looking at a projected 3.3% annual increase at 1.62 million TEU, and July is looking at an expected 3.1% annual gain at 1.68 million TEU. August, which is traditionally the highest-volume month of the year, is expected to rise 1.6% at 1.74 million TEU, with September at 1.65 million TEU looking at a 3.6% annual gain.  

Like last month, the report is calling for the first half of 2017 to come in at 9.5 million TEU for a 5.6 percent annual gain.

The report also noted that these growth estimates match up well with the NRF’s projection of retail sales rising between 3.7 and 4.2% in 2017, excluding automobiles, gasoline, and restaurants, compared to 2016. It explained that these gains are expected to be paced by the combination of job and income growth and low debt. And it added that cargo volume does not correlate directly with sales, due to the fact that only the number of containers is counted and not the value of cargo inside, explaining that it still provides a barometer of retailers’ expectations.

“In the United States, the economy continues to slowly grow,” wrote Hackett Associates Founder Ben Hackett in the report.  “Gross domestic product was lower than expected in the first quarter but unemployment has dropped to levels not seen since before the Great Recession and, best of all, labor employment has increased dramatically. Our view therefore remains unchanged: There is nothing to worry about in the first half of the year, and growth is expected to continue in the second half even if it comes at a slower rate.”

Import growth is expected to continue into the third quarter and subsequently decline in the following two quarters, with 2017 seeing a 3.2 percent annual increase over 2016 at more than 22 million TEU, with East Coast ports expected to outperform West Coast ports, Hackett noted.

“The three mega alliances have now, more or less, announced their port rotations for each of their services,” wrote Hackett. “What we see is bigger ships, fewer ports of call and better management of capacity. This means importers will need to ensure that their logistics-management skills cope with the larger bundles of volumes being moved on individual services while terminals will be faced with the task of moving more containers in the shortest possible time. Freight rates will move up for the next few months, but as demand growth slows we may see more market-share strategies returning, which will depress freight charges.”