With the US retail industry in its annual lull between seasons and plans for a tariff increase on hold, imports at the nation’s major retail container ports are expected to drop to their lowest level in almost a year this month.
US tariffs of 10% on US$200bn worth of Chinese goods that took effect last September were scheduled to increase to 25% on 1 March. But the rise was postponed by President Trump, citing progress in talks between Washington and Beijing. The tariff increase is now on hold until further notice as the US and China try to conclude negotiations for a signing summit between Trump and President Xi later this month or in April.
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According to the monthly Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates, major US retail container ports handled 1.89m Twenty-Foot Equivalent Units (TEU) in January, the latest month for which after-the-fact numbers are available. That was down 3.7% from December following the end of the holiday season but up 7.4% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.
February was estimated at 1.79m TEU, up 6.2% from February 2018. March is forecast at 1.59m TEU, up 3.2% year-over-year but the lowest level since 1.63m TEU in April 2018. February and March are historically the two slowest shipping months of the year both because retailers are between major shopping seasons and because of factory shutdowns in Asia during the Lunar New Year holiday.
Meanwhile, looking further ahead, April is forecast at 1.75m TEU, up 7% year-over-year; May at 1.88m TEU, up 3.3%; June at 1.88m TEU, up 1.7%, and July at 1.96m TEU, up 2.7%.
Imports during 2018 set a new record of 21.8m TEU, an increase of 6.2% over 2017’s previous record of 20.5m TEU. The first half of 2019 is expected to total 10.8m TEU, up 4.8% over the first half of 2018.
“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,” NRF vice president for supply chain and customs policy Jonathan Gold said. “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.”
Hackett Associates founder Ben Hackett added: “The trade war with China is turning out not to have the results President Trump expected. Imports from China did not decline – in fact, they soared to record levels.”
