Port Tracker report signals volume growth will remain but at a reduced level

High levels of imports are expected to remain intact at United States-based retail container ports, albeit at a lower level than a year ago at this time, as retail shippers rushed to bring goods into the U.S., in advance of scheduled tariff increases, according to the most recent edition of the Port Tracker report published today 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.

In June, following a meeting with China’s President Xi, President Donald Trump said the U.S. would not implement tariffs on an additional $300 billion in Chinese goods, as negotiations resume. And the report explained that in addition to the tariffs that have gone into effect over the last year, the next round of tariffs would tax nearly all imported goods from China into the U.S.

“Retailers still want to protect their customers against potential price increases that would come with any additional tariffs, but with the latest proposed tariffs on hold for now and warehouses bulging, there’s only so much they can do,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “We will still see some near-record numbers this summer, but right now no one knows whether there will be additional tariffs or not. We hope the restarted negotiations with China will result in significant reforms rather than more tariffs that tax American companies and consumers.”

U.S. ports covered in the report handled 1.85 million Twenty-Foot Equivalent Units (TEU) in May, the most recent month for which after-the-fact numbers are available, which was up 6% compared to April and up 1.4% annually. June was pegged at 1.87 million TEU, up 0.8%, and August is estimated to come in at 1.96 million TEU for a 3.4% annual gain. September and October are forecasted to come in at 1.89 million TEU (a 1.1% increase) and 1.94 million TEU (a 4.5% decrease), respectively.

Should these numbers come to fruition, the report said August would match December 2018, which came in ahead of a scheduled January 1 tariff increase that was pushed off until the spring, and it would be the second highest tally recorded, trailing only October 2018’s 2 million TEU. The report stated that the lower projected annual gains for the coming months are up against double-digit gains over several months in 2018, driven by retailers acting to import Chinese-originated goods before expected tariff increases.

Port Tracker expects the first half of 2019 to be up 2.8% annually at an estimated 10.6 million TEU.

“We can see that trade and imports are declining compared with last year’s growth rates as a result of the trade wars being waged by the United States in the global economy,” wrote Hackett Associates Founder Ben Hackett in the report. “Trade has become the sharp end of foreign policy, and we continue to believe that this will ultimately damage both sides of the conflict in a lose-lose situation. Imports of consumer goods continue to grow as importers purchase items in expectation of further increases in tariffs, the cost of which will be borne by the American consumer. This is beginning to have an impact on consumer sentiment, which is weakening.”