Cargo Imports Dip, But Tariff Delay Paves Way for an Uptick
Date: Tuesday, April 9, 2019
Source: Sourcing Journal
With factories in China shutting down during February for Lunar New Year, cargo importsat major U.S. retail container ports fell 14.3 percent compared to January and 4 percent from a year earlier to 1.62 million twenty-foot equivalent units (TEU), according to the monthly Global Port Tracker report released Monday by the National Retail Federation and Hackett Associates.
However, with tariff increases delayed for the foreseeable future and the summer selling season approaching, cargo shipments entering U.S. ports is expected to picked up.
“Retailers are starting to stock up in anticipation of a strong summer,” Jonathan Gold, vice president of supply chain and customs policy at NRF, said. “Tariff increases are on hold and progress is being reported in talks between the United States and China, so the imports we’re seeing now are driven primarily by expectations for consumer demand.”
March cargo container imports at U.S. ports covered by Global Port Tracker were estimated at 1.63 million TEU, up 5.9 percent year-over-year, and April shipments are forecast to increase 6.9 percent to 1.75 million TEU. A TEU is one 20-foot-long cargo container or its equivalent.
The uptick is expected to continue, with May cargo imports projected to rise 4 percent to 1.9 million TEU. June shipments are seen rising 2 percent to 1.89 million TEU, July will likely be up 2.9 percent to 1.96 million TEU, and August imports expected to jump 4.3 percent gain to 1.97 million TEU. The August shipments would be the highest since the record 2 million TEU set in October as retailers brought holiday merchandise into the country ahead of expected tariff increases, Global Port Tracker noted.
Cargo container imports set a record in 2018, rising 6.2 percent to 21.8 million TEU compared to 2017’s previous record of 20.5 million TEU. The first half of 2019 is expected to total 10.7 million TEU, up 3.7 percent over the first half of 2018.
“The U.S. consumer, while more cautious, has not stopped spending,” Hackett Associates founder Ben Hackett said. “The inventory-to-sales ratio, however, is on the rise. Part of this can be attributed to the heavy front-loading of imports ahead of expected tariff increases that took place in 2018.”
U.S. tariffs of 10 percent on $200 billion worth of Chinese goods that took effect last September were scheduled to rise to 25 percent in March, but President Trump postponed the increase, citing progress in talks between Washington and Beijing. Those talks are still ongoing, with varying perspectives on actual headway, but the tariff increase has been put on hold indefinitely while the negotiations continue.
Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach and Oakland, Calif., and Seattle and Tacoma, Wash., on the West Coast; New York/New Jersey; Port of Virginia; Charleston, S.C.; Savannah, Ga., and Port Everglades, Miami and Jacksonville, Fla., on the East Coast, and Houston on the Gulf Coast.