Importers Craft Shipping Schedule to Mitigate Tariff Impact
Date: Tuesday, September 10, 2019
Source: Sourcing Journal
The monthly Global Port Tracker report released Tuesday by the National Retail Federation (NRF) and Hackett Associates, shows cargo imports at major U.S. retail container ports reached unusually high numbers just before new tariffs on goods from China took effect Sept. 1, and are expected to surge again before another round of tariffs takes effect in December.
“Retailers are still trying to minimize the impact of the trade war on consumers by bringing in as much merchandise as they can before each new round of tariffs takes effect and drives up prices,” said Jonathan Gold, vice president for supply chain and customs policy at the NRF. “That’s the same pattern we’ve seen over the past year. But we’re very quickly going to be at the point where virtually all consumer goods will be subject to these taxes on American families.”
New 15 percent tariffs on a wide range of consumer goods from China took effect at the beginning of the month and are scheduled to be expanded to additional goods on Dec. 15, covering around $300 billion in imports from the United States’ current trade rival. In addition, 25 percent tariffs on $250 billion worth of imports already imposed over the past year are set to increase to 30 percent on Oct. 1.
U.S. ports covered by Global Port Tracker handled 1.96 million 20-Foot Equivalent Units (TEU) in July, up 9.1 percent from June and 2.9 percent more than a year earlier. A TEU is one 20-foot-long cargo container or its equivalent.
Numbers were also high in August at an estimated 1.93 million TEU, an increase of 1.8 percent year-over-year. September shipments are forecast to be down 0.7 percent to 1.85 million TEU and October cargo imports are seen declining 5.5 percent to 1.92 million TEU.
According to Global Port Tracker, November shipments are expected to bounce back 8.8 percent to 1.97 million TEU—which would be the highest monthly total since a record 2 billion TEU in October 2018—likely driven by the new tariffs scheduled for December. Cargo hitting the ports in December is projected to drop 9.8 percent compared to last year to 1.77 million TEU.
In the first half of 2019, cargo container imports totaled 10.5 million TEU, up 2.1 percent over the first half of 2018, and 2019 is expected to see a new record of 21.9 million TEU. That would be up 0.7 percent from last year’s previous record of 21.8 million TEU.
Global Port Tracker covers the 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.