CSCMP's Supply Chain Quarterly
July 17, 2019
Forward Thinking

Retailers ease off on import rush as administration delays tariff threat

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NRF, Hackett report shows May container imports were up 6 percent from April but rose just 1.4 percent year-over-year.

Imports at the nation's major retail container ports will remain at high levels this summer but are expected to grow only modestly compared with last year's rush to bring merchandise into the country ahead of scheduled tariff increases, according to the latest monthly cargo data from the National Retail Federation (NRF) and maritime consultants Hackett Associates.

Additional tariff hikes were delayed by President Trump in May after he met with China's President Xi Jinping, saying the move would buy time for trade negotiators. Coupled with tariffs imposed over the past year, the new round would have taxed almost all goods the U.S. imports from China, according to the monthly "Global Port Tracker" report released today. 

U.S. ports covered by the report handled 1.85 million twenty-foot equivalent units (TEUs) in May, the latest month for which after-the-fact numbers are available. That was up 6 percent from April and up 1.4 percent year-over-year.

June is estimated to reach 1.87 million TEU, up only 0.8 percent year-over-year. July is forecast at 1.93 million TEU, up 1.3 percent; August at 1.96 million TEU, up 3.4 percent; September at 1.89 million, up 1.1 percent; October at 1.94 million TEU, down 4.5 percent, and November at 1.88 million TEU, up 4.3 percent.

If born out, the August number would equal the total seen last December just ahead of a scheduled January 1 tariff increase that was ultimately delayed until this spring, and would be second only to the 2 million TEU record set last October, the report said. But the small year-over-year increases expected in the next few months compare with double-digit growth in multiple months last year, when retailers rushed to import Chinese merchandise ahead of expected tariff increases.

"Retailers still want to protect their customers against potential price increases that would come with any additional tariffs, but with the latest proposed tariffs on hold for now and warehouses bulging, there's only so much they can do," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a release. "We will still see some near-record numbers this summer, but right now no one knows whether there will be additional tariffs or not. We hope the restarted negotiations with China will result in significant reforms rather than more tariffs that tax American companies and consumers." 

Imports during 2018 set a record of 21.8 million TEU, an increase of 6.2 percent over 2017's previous record of 20.5 million TEU, the report found. The first half of 2019 totaled an estimated 10.6 million TEU, up 2.8 percent over the first half of 2018.

"Imports of consumer goods continue to grow as importers purchase items in expectation of further increases in tariffs, the cost of which will be borne by the American consumer," Hackett Associates Founder Ben Hackett said in the report. "Trade has become the sharp end of foreign policy, and we continue to believe that this will ultimately damage both sides of the conflict in a lose-lose situation."

The Global Port Tracker report, which is produced for NRF by Hackett, covers the ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast, and Houston on the Gulf Coast.

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