Imports at major US retail container ports are expected to grow nearly 5% year-on-year during the first half of 2018 thanks to favourable tax reform and improved confidence, new figures show.
According to the latest Global Port Tracker report released on Friday (9 February) by the National Retail Federation (NRF) and Hackett Associates, the total for 2017 came in at 20.5m Twenty-Foot Equivalent Units (TEU), topping last year’s previous record of 19.1m TEU by 7.6%. That would be more than double 2016’s 3.1% increase over 2015.
2017 set an all-time monthly record of 1.8m TEU in August and included five of only seven months when imports have hit 1.7m TEU or higher.
Ports covered by Global Port Tracker handled 1.72m TEU in December, the latest month for which after-the-fact numbers are available. With most holiday merchandise already in the country by then, the number was down 2.1% from November but up 8.4% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.
For the first half of 2018, imports are expected to grow a healthy 4.9% over the same period of 2017 to reach a total of 10.3m TEU.
January was estimated at 1.77m TEU, up 4.1% year-over-year. February is forecast at 1.67m TEU, up 14.8% from last year; March at 1.54m TEU, down 1.1%; April at 1.71m TEU, up 4.8%; May at 1.8m TEU, up 2.8%, and June also at 1.8m TEU, up 4.9%. The February and March percentages are skewed because of changes in when Asian factories close for Lunar New Year each year.
“We’re forecasting significant sales growth this year and that means retailers will have to import more merchandise to meet consumer demand,” says NRF vice president for supply chain and customs policy, Jonathan Gold said. “With the benefits of pro-growth tax reform coming on top of solid fundamentals like higher employment and improved confidence, we expect a good year ahead.”
Cargo volume does not correlate directly with sales because only the number of containers is counted, not the value of the cargo inside, but nonetheless provides a barometer of retailers’ expectations.
“It’s clear that 2017 turned out to be a remarkable year in terms of import container volume,” says Hackett Associates founder Ben Hackett said. “That level of growth is difficult to sustain, however, and our models suggest that 2018 will continue to expand but only at about half that pace despite strong fundamentals that indicate a healthy economy and continued growth in consumer spending.”
The import projection comes a day after NRF forecast that 2018 retail sales will grow between 3.8% and 4.4% over 2017’s $3.53trn.
This month, many factories in China will close for up to four weeks in celebration of the New Year that begins on 16 February – posing massive problems for many small to mid-sized retailers and importers who must ensure that their spring season merchandise is produced, paid for and shipped prior to the shutdown.