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Retail Cargo Imports Set Records Ahead of Expected Tariffs

Cargo imports at U.S. container ports have set records this summer as retail sales remain strong and merchants rush to bring merchandise in ahead of proposed new tariffs on goods from China, according to a new Global Port Tracker report from the National Retail Federation and Hackett Associates.

Tariffs on most consumer products have yet to take effect, but retailers appear to be getting prepared before that can happen,” Jonathan Gold, vice president for supply chain and customs policy at the NRF said. “We’re seeing new record levels every month this summer. Much of that is to meet consumer demand as tax reform and a thriving economy drive retail sales, but part of it seems to be concern over what’s to come. The good news for consumers is that avoiding tariffs holds off price increases that will inevitably come if the reckless and misguided trade war is allowed to continue.”

Ports covered by Global Port Tracker handled 1.85 million twenty-foot equivalent units (TEU) in June, an increase of 1.6% from May and up 7.8% year-over-year.

July shipments were estimated at 1.88 million TEU, up 4.4% from a year earlier, while August is forecast at 1.91 million TEU, which would be a 4.4% year-on-year gain. Looking at the coming months, Global Port Tracker forecasts September retail cargo imports to rise 2.1% to 1.82 million TEU, October shipments to be ahead 4.9% to 1.88 million, November to increase 2.6% to 1.81 million TEU and December to see a 4 percent hike to 1.79 million TEU.

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The containers imported in June set a new record for the amount of containers imported during a single month, beating the previous record of 1.83 million TEU in August 2017. Based on current projections, July’s numbers could take the record higher and August’s could see it climb further still.

While cargo numbers do not correlate directly with sales, the record imports mirror strong results seen by retailers this spring and summer that are expected to continue through the remainder of the year. Retail sales as calculated by NRF–excluding automobiles, restaurants and gasoline stations–were up 4.2% year-over-year in June and 4.4% on a three-month moving average. NRF is forecasting that total 2018 sales will be up between 3.8% and 4.4% over 2017.

The first half of 2018 totaled 10.3 million TEU, an increase of 5.1% over the first half of 2017. The total for 2018 is expected to reach 21.4 million TEU, which would be an increase of 4.4% over last year’s record 20.5 million TEU.

“Global Port Tracker has only marginally downgraded imports for 2018, but we expect to see a larger downturn going into 2019 resulting from the trade war, as well as an anticipated slowing of the economy,” Hackett Associates founder Ben Hackett said.