US retail imports in 2019 are expected to reach a new record of 22m TEU

US retail imports in 2019 are expected to reach a new record of 22m TEU

Imports at major US retail container ports are expected to see their final surge of the year this month ahead of new tariffs set to take effect in December.

President Trump announced a tentative agreement on a partial trade deal with China last month, but officials are still working on the details and have not announced a date or location for the measure to be signed. An October tariff increase was cancelled and news reports this week indicate that some tariffs could be removed, but there has been no word on a new round of tariffs on consumer goods currently scheduled to take effect 15 December.

"Retailers are highly competitive, but the ability to compete has been challenging this year because of the uncertainty of the trade war and continued tariff escalation," explains Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF). "Retailers are encouraged by reports that China and the United States have agreed to remove at least some of the existing tariffs once a 'phase one' deal is signed. We are eager to see concrete evidence that the trade war is coming to an end with a final deal that removes all tariffs."

The latest Global Port Tracker report released by the NRF and Hackett Associates shows US ports handled 1.87m Twenty-Foot Equivalent Units (TEU) in September, the latest month for which after-the-fact numbers are available. That was up 0.2% year-over-year but was down 4.7% from August, when imports saw their second-highest level on record – 1.97m TEU – ahead of tariffs that took effect 1 September. A TEU is one 20-foot-long cargo container or its equivalent.

October was estimated at 1.93m, down 5.2% from last year's record 2m TEU. November is forecast at 1.96m TEU, up 8.3% year-over-year and tying last December and this July for the third-highest number of containers in a single month.

However, imports are expected to fall to 1.78m TEU in December, down 9.2% from near-record numbers last year ahead of scheduled tariffs that were later postponed. The expected drop from November will come as December's tariffs take effect, but the month historically sees a falloff in imports because most holiday merchandise has already arrived by that point.

The first half of 2019 totaled 10.5m TEU, up 2.1% over the first half of 2018, and 2019 is expected to see a new annual record of 22m TEU. That would be up 1% from last year's previous record of 21.8m TEU.

Looking to next year, January 2020 is forecast at 1.85m TEU, down 2.3% from January 2019, while February – traditionally the slowest month of the year because of Lunar New Year factory shutdowns in Asia – is forecast at 1.59m TEU, down 2.1% from a year ago.

March, meanwhile, is forecast at 1.76m TEU, up an unusually high 9.1% because of fluctuations in the Lunar New Year calendar.

"Industry planning is in a state of confusion with the on-again, off-again tariff increases and the widening of trade disputes," adds Hackett Associates founder Ben Hackett. "Where is all of this leading us? As long as consumer spending remains relatively stable, economic growth – despite being weaker – will keep the country on track for the next year."