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Cargo Imports Hit Record Highs But Slowdown Seen Coming

Imports at the nation’s major retail container ports set an all-time monthly record this summer and 2017 is expected to reach a new yearly record, followed by slower in growth in the new year, according to the monthly Global Port Tracker report released Friday by the National Retail Federation and Hackett Associates.

“Consumers are buying more and retailers are scrambling to import more merchandise to keep up with the demand,” said Jonathan Gold, vice president for supply chain and customs policy at NRF. “Docks have been busier than ever as ships unload cargo headed for store shelves, and that’s a good sign both for retail sales and the nation’s economy.”

Ports covered by Global Port Tracker handled 1.78 million Twenty-Foot Equivalent Units in July, a 5 percent increase from June and 9.2% higher than July 2016. It was the highest monthly volume recorded since NRF began tracking imports in 2000, beating the previous record of 1.73 million TEU in March 2015. A TEU is one 20-foot-long cargo container or its equivalent.

Global Port Tracker had previously forecast that the record would be 1.75 million TEU and would be set in August, but the record came in higher and sooner than expected. August’s actual volume was estimated at 1.71 million TEU, a drop of 0.1% from last year, but still one of the five highest months on record.

September cargo imports are forecast to be up 4.7% from last year to 1.67 million TEU and October is forecast to be ahead 2 percent to 1.7 million TEU, while November shipments are expected to fall 2.3% to 1.61 million TEU and December to rise 0.5% to 1.58 million TEU.

While Hurricane Harvey slowed Gulf Coast cargo and Hurricane Irma is expected to do the same in Florida, neither is expected to significantly impact national totals, NRF said.

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Growth has slowed from the first half of the year, but 2017 is expected to total 19.7 million TEU, topping last year’s previous record of 18.8 million TEU by 4.8%. That compares with 2016’s 3.1% increase over 2015. The first half of 2017 totaled 9.7 million TEU, up 7.5% from the same period in 2016.

After the busy holiday season, January 2018 is forecast at 1.63 million TEU, down 2.6% from January 2017.

[Read more about cargo volume: Cargo Volume Hits Record at Port of New York & New Jersey]

The import numbers come as retail continues a long-term pattern of increased sales. Total retail sales have grown year-over-year every month since November 2009, and retail sales as calculated by NRF–excluding automobiles, gasoline stations and restaurants–have increased year-over-year in all but three months since the beginning of 2010.

Imports are growing even though NRF this week adjusted its forecast for 2017 retail sales, predicting growth of between 3.2% and 3.8% rather than the 3.7% to 4.2% forecast earlier. Cargo volume does not correlate directly with sales because only the number of containers is counted, not the value of the cargo inside, but still provides a barometer of retailers’ expectations.

Despite the record imports, Hackett Associates founder Ben Hackett cautioned that cargo volume increases are expected to slow in the coming year. He said 2017 “is turning out to be a bumper year, causing a sense that growth is unstoppable. Taking this view is risky, however. As we look forward, our models are projecting a slowdown. The positive takeaway is that this is a slowdown in growth, not an actual reduction in volume.”

West Coast imports are expected to grow only 0.3% during the first half of 2018 over the same period in 2017, Hackett said. On the East Coast, which has been gaining market share from the West Coast, volume should grow 1 percent.

Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach and Oakland, California; Seattle and Tacoma, Washington on the West Coast; New York/New Jersey; Hampton Roads, Virginia; Charleston, South Carolina; Savannah, Georgia, and Port Everglades and Miami, Florida on the East Coast, and Houston on the Gulf Coast.