2019 is expected to see a new annual record of 21.9m TEU

2019 is expected to see a new annual record of 21.9m TEU

Volume at major US retail container ports surged significantly in November as retailers imported merchandise ahead of new tariffs set to take effect later this month.

A new round of tariffs – including some apparel items for which China's share of US world imports is largely more than 75% – is due to take effect from 15 December.

"At this point, holiday merchandise is already in the country, so the direct impact of new tariffs won't be seen until the season is over," explains Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF).

"Nonetheless, tariffs are bad for both consumer and business confidence, and we hope that the December tariffs will be cancelled or postponed as a sign of good faith. We need a deal with China as soon as possible so we can bring an end to the trade war that has put a drag on the US economy for far too long."

The latest Global Port Tracker report released by the NRF and Hackett Associates shows US ports handled 1.88m Twenty-Foot Equivalent Units (TEU) in October, the latest month for which after-the-fact numbers are available. That was up 0.6% from September but down 7.5% from the all-time monthly record of 2m TEU in October 2018. TEU is one 20-foot-long cargo container or its equivalent.

November jumped to an estimated at 1.95m TEU, up 8% year-over-year as retailers front-loaded imports ahead of this month's scheduled tariffs. That was the highest number since 1.97m TEU in August when retailers did the same ahead of tariffs that took effect in September.

However, imports are expected to fall to 1.79m TEU in December, both because of the new tariffs and the usual falloff in imports as the holiday season winds down. The projected December number is down 8.9% from high numbers seen a year ago during a similar pattern of bringing in merchandise ahead of new tariffs.

The first half of 2019 totalled 10.5m TEU, up 2.1% over the first half of 2018, and 2019 is expected to see a new annual record of 21.9m TEU. That would be up 0.8% from last year's previous record of 21.8m TEU.

Looking to next year, January 2020 is forecast at 1.87m TEU, down 1.2% from January 2019. February – traditionally the slowest month of the year because of Lunar New Year factory shutdowns in Asia – is forecast at 1.62m TEU, down 0.3% from a year ago.

March, meanwhile, is forecast at 1.76m TEU, up an unusually high 9.2% because of fluctuations in the Lunar New Year calendar, while April is forecast at 1.84m TEU, up 5.6% year-over-year.

"The US consumer has shrugged off the slowdown in the economy," adds Hackett Associates founder Ben Hackett. "Even though growth has slowed, low unemployment and higher wages have helped bolster purchases and, thereby, imports for consumer goods."

Nonetheless, the trade war is "one of the factors that is impacting our forward-looking models as we continue to show slower long-term growth in import volumes," Hackett says.