With Tariff Hike on Hold, Retail Cargo Imports to Slow in March
Date: Tuesday, March 12, 2019
Source: Sourcing Journal
Cargo imports at major U.S. container ports are expected to fall to their lowest level in nearly a year in March, with the retail industry between seasons and plans for a tariff increase for Chinese imports on hold, according to the Global Port Tracker report released Friday by the National Retail Federation (NRF) and Hackett Associates.
U.S. tariffs of 10 percent on $200 billion worth of Chinese goods that took effect in September were scheduled to increase to 25 percent on March 2, but the increase was postponed by President Trump, citing progress in talks between Washington and Beijing. The White House said this week that the tariff hike is on hold until further notice as the U.S. and China try to conclude negotiations for a signing summit between the heads of state that could happen later this month, or in April.
“Now that the holiday season is over and summer has yet to crank up, this is the quiet time of year for retail supply chains,” said Jonathan Gold, vic president for supply chain and customs policy at NRF. “Retailers are also taking a break from the rush to bring merchandise in ahead of tariff hikes now that the increase that was scheduled for March has been delayed. We are hoping that the delay is permanent and, better yet, that tariffs of the past year will be removed entirely. But either way, imports will start to build up again soon as retailers prepare for the summer.”
U.S. ports covered by Global Port Tracker handled 1.89 million Twenty-Foot Equivalent Units (TEU) in January. That was down 3.7 percent from December, but up 7.4 percent year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.
February cargo imports increased an estimated 6.2 percent year-over-year to 1.79 million TEU. March shipments are forecast at 1.59 million TEU, up 3.2 percent year-over-year, but the lowest level since 1.63 million TEU last April. Global Port Tracker noted that February and March are historically the two slowest shipping months of the year, with retailers between major shopping seasons and factories in Asia shuttered during the Lunar New Year holiday.
April cargo imports are forecast to rise 7 percent to 1.75 million TEU, while May shipments are seen increasing 3.3 percent to 1.88 million TEU, June arrivals are forecast to grow 1.7 percent to 1.88 million TEU and July imports are projected to be up 2.7 percent to 1.96 million TEU.
Imports during 2018 set a new record of 21.8 million TEU, an increase of 6.2 percent over 2017’s previous record of 20.5 million TEU. The first half of 2019 is expected to total 10.8 million TEU, which would be a 4.8 percent increase over the first half of 2018.
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.