Strong United States-bound retail container imports appears to be in the cards in the coming months, according to the most recent edition of the Port Tracker report issued this 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, 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.
“Consumers are spending more freely and retailers are stocking up for the spring and summer seasons,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Merchants are making sure they are prepared to meet growing demand, and imports are essential to providing American families with the products they need at prices they can afford.”
For January, the most recent month for which data is available, ports in the report handled what was cited as an “unusually high” 1.67 Twenty-Foot Equivalent Units (TEU), which was up 6.5 percent compared to December and was up 12.5 percent annually. This high volume level came on the heels of Asia-based factories shutting down in advance of the Lunar New Year.
The report pegged February at 1.61 million TEU for a 4.2 percent annual increase. But the larger volumes appear to be slated for March and April, which are estimated to hit 1.46 million TEU (a 10.6 percent annual gain) and 1.59 million TEU (a 10.1 percent annual gain), respectively. May is projected to be up 2.9 percent annually at 1.67 million TEU, and June is expected to see a 5.5 percent annual increase at 1.66 million TEU.
While the projected volume gains are encouraging, there are also some tailwinds to keep an eye on, too, according to Ben Hackett, Founder of Hackett Associates.
“The threat of a “border adjustment” tax, withdrawal from the Trans-Pacific Partnership and a possible rewrite of the North American Free Trade Agreement might eventually dampen the trading spirit and discourage international trade,” Hackett wrote in the report. “In the meantime, the opposite is happening – trade is continuing to grow despite these developments in Washington. Even though imports are growing, retailers are doing a better job of balancing inventory and sales. The inventory-to-sales ratio has come off its 2016 peak of 1.4 and was down to 1.35 in December, the latest reported data. That is still high compared with the previous three years but we expect it go down further, closer to 1.3.”
Hackett added that consumer confidence is expected to remain strong for the foreseeable months and will continue to support growth in imports, noting that because of this it has adjusted its forecasts upwards.
“Risks are minimal at this stage and if the proposed $1 trillion infrastructure program takes off in the coming year, then perhaps the growth will be sustained,” Hackett wrote. “There is, however, a fair amount of uncertainty which can slow trade as well.”
Source: Logistics Management