With holiday season approaching, import growth gains traction, says Port Tracker report

With the holiday season quickly approaching, gains in imports are following, according to the most recent edition of the Global Port Tracker report by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

The anticipated import growth continues the trend of seasonal cargo flows taking hold for United States-based retail container ports.

“After supply chain worries earlier this year, inventories are plentiful this fall,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Shoppers should have no worries about finding what they’re looking for as they begin their holiday shopping.”

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.

The Port Tracker report said that July, the most recent month for which data is available, handled 1.62 million TEU (Twenty-Foot Equivalent Units), which it said was up 2.9 percent compared to June and up 8.1 percent compared to June 2014

Port Tracker estimates August at 1.6 million TEU for a 5.5 percent annual gain, with September at 1.61 million TEU for a 1.2 percent annual increase. September, October, and November are expected to come in at 1.61 million TEU (for a 1.2 percent annual increase), 1.62 million TEU (for a 3.8 percent annual increase), and 1.5 million TEU (for a 7.9 percent annual increase), respectively. December is expected to be down 0.2 percent at 1.44 million TEU.

Should these estimates hold, the report said that 2015 would finish with 18.2 million TEU, which would mark a 5.4 percent annual gain. For the first half of 2015, imports saw a 6.5 percent annual gain at 8.9 million TEU.

Hackett Associates Founder Ben Hackett said in the report that while the most recent second quarter GDP estimate came in at 3.7 percent, which is a marked improvement over 0.6 percent for the first quarter,  “a stubbornly high inventory to sales ratio “ is still causing concern over the direction of the third quarter.

“We have been concerned about the high ratio which under normal circumstances would herald a probable recession, but it appears that the supply chain management in the face of the West Coast labor problems took a wrong turn and built up too much inventory,” he wrote.

As for the remainder of 2015, Hackett wrote that some weakness is expected closer towards the end of the year, with 2015 not expected to outpace 2014 by more than 6 percent

And he added that this is made clearer by carriers announcing further skipped sailings as a way of dealing with excess capacity while overall demand is weak.

Congestion is easing off, excess capacity is not getting better, inventory remains stubbornly high, and second half growth in volumes will be slower than first half,” Hackett told LM. “Generally things are good, but the situation in China is a worry as is the lack of traction in Europe.  Cautious optimism [remains intact].”