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Retailers Still Hedging Imports Against Possible Tariffs, But Not at Last Year’s Pace

Cargo imports at major U.S. retail container ports will remain at high levels this summer, but are expected to grow more modestly than last year, when retailers rushed to bring merchandise in ahead of scheduled tariff increases.

“Retailers still want to protect their customers against potential price increases that would come with any additional tariffs, but with the latest proposed tariffs on hold for now and warehouses bulging, there’s only so much they can do,” Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF), said in the monthly Global Port Tracker report released Wednesday by NRF and Hackett Associates. “We will still see some near-record numbers this summer, but right now no one knows whether there will be additional tariffs or not. We hope the restarted negotiations with China will result in significant reforms rather than more tariffs that tax American companies and consumers.”

President Trump announced after meeting with China’s President Xi Jinping last month that he would hold off on tariffs on an additional $300 billion in Chinese goods that could include apparel while negotiations between the two countries resume.

U.S. ports covered by Global Port Tracker handled 1.85 million 20-foot equivalent units in May. That was up 6 percent from April, and up 1.4 percent year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.

June cargo imports were estimated to be up 0.8 percent year over year to 1.87 million TEU, while July is forecast to increase 1.3 percent to 1.93 million TEU. August is seen growing 3.4 percent to 1.96 million TEU. Looking ahead, September container shipments are forecast to grow 1.1 percent to 1.89 million, while they may fall 4.5 percent in October to 1.94 million TEU before climbing back up 4.3 percent in November to 1.88 million TEU.

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The August number would equal the total seen last December just ahead of a scheduled Jan. 1 tariff increase that was ultimately delayed until this spring, and would be second only to the 2 million TEU record set last October. But the small year-over-year increases expected in the next few months compare with double-digit growth in multiple months last year as retailers scrambled to import Chinese merchandise ahead of expected tariff increases.

The first half of 2019 totaled an estimated 10.6 million TEU, up 2.8 percent over the first half of 2018.

Global Port Tracker covers the U.S. ports of Los Angeles-Long Beach and Oakland, Calif., and Seattle and Tacoma, Wash., on the West Coast; New York-New Jersey; Port of Virginia; Charleston, S.C., Savannah, Ga., and Port Everglades, Miami and Jacksonville, Fla., on the East Coast, and Houston on the Gulf Coast.