Inbound container volumes expected to return to their usual seasonal patterns during the first few months of 2020, assuming the US and China sign a ‘Phase One’ partial trade deal on Wednesday.
After a year of volatility driven by the uncertainty of the US trade war with China, container import volumes shipped through the major US container ports are expected to return to their usual seasonal patterns during the first few months of 2020, according to the Global Port Tracker report released today by the National Retail Federation (NRF) and industry consultant Hackett Associates.
“We’ll be more confident after we see the ‘Phase One’ agreement signed, but right now 2020 looks like it should be back to what used to be normal,” said NRF vice president for supply chain and customs policy Jonathan Gold.
“We’ve been through a cycle of imports surging ahead of expected tariff increases – some of which got delayed, reduced or cancelled – and falling off again afterward. That’s not good for retailers trying to manage their inventory levels or trying to make long-term business plans. And tariffs are never good for consumers, businesses or the economy.”
Citing recent government data on declines in industrial production and increases in inventory-to-sales ratios, Hackett Associates’ founder Ben Hackett said: “It is not surprising that even the Federal Reserve suggests that the impact of the trade war has a negative impact on the US economy. This combination of reduced output counterbalanced by increased inventory underlies the uncertainties of the tariff wars.”
President Trump is scheduled to sign a ‘Phase One’ partial trade deal with China on Wednesday. In announcing the deal, the administration said it would lower tariffs that took effect in September and cancelled another round that was set to take effect on 15 December, although others remain in effect, the NRF and Hackett noted.
US ports covered by Global Port Tracker handled 1.67 million TEU in November, the latest month for which after-the-fact numbers are available. That was down 11.2% from October and down 7.5 year-over-year. With on-again, off-again progress on trade negotiations reported throughout the fall and other factors affecting shipping, an expected surge ahead of the cancelled December tariff increase did not materialize. TEU is one 20-foot-long cargo container or its equivalent.
December was estimated at 1.7 million TEU, down 13.4% from unusually high numbers seen in December 2018, when retailers had frontloaded imports ahead of a scheduled 1 January 2019 tariff increase that was ultimately postponed.
While numbers for the full year are not yet final, estimates indicate that 2019 came in at 21.6 million TEU, a 0.9% decrease from 2018 but still the second-highest year on record, NRF and Hackett said. Imports during 2018 hit a record 21.8 million TEU, partly due to frontloading ahead of anticipated 2019 tariffs.
January is forecast at 1.8 million TEU, down 5% from January 2019. February is forecast to be down 4.9%, year over year, at 1.54 million TEU but March is expected to be up 5.2% at 1.7 million TEU, with both swings tied to fluctuations in the Lunar New Year calendar and related factory shutdowns in Asia, NRF and Hackett explained.
April is forecast at 1.78 million TEU, up 2.1%, year over year, and May is forecast at 1.87 million TEU as summer merchandise arrives, up 1%, year over year.
Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the US 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.
Source: Lloyd’s
