US retail imports profit at peril
Tariff
Wild Card threatens US retail
With
retail sales continuing to grow, imports at the nation’s major retail container
ports are expected to remain strong this month after setting three new records
this summer, according to the monthly Global Port Tracker report released by
the National Retail Federation (NRF) and Hackett Associates.
“More
tariffs could come any day, and retailers have been bringing in record amounts
of merchandise ahead of that in order to mitigate the impact on their
customers,” NRF Vice President for Supply Chain and Customs Policy Jonathan
Gold said. “Retail sales are growing stronger than expected this year thanks to
tax cuts and job creation, but tariffs are the wild card that threatens to
throw away a significant portion of those benefits.”
“The
current boom in shipping can primarily be explained by importers’ response to
the U.S. trade war with China,” Hackett Associates Founder Ben Hackett said.
“Consumers appear to be spending money on goods ahead of the tariff price
increases that will eventually come. But there could be a rocky road ahead as
the impact of tariffs begins to be more fully felt.”
Ports
covered by Global Port Tracker handled 1.9 million Twenty-Foot Equivalent Units
in July, the latest month for which after-the-fact numbers are available. That
was up 2.8 percent from June and up 5.6 percent year-over-year. A TEU is one
20-foot-long cargo container or its equivalent.
August
was estimated at 1.92 million TEU, up 4.8 percent year-over-year. September is
forecast at 1.83 million TEU, up 2.4 percent; October at 1.88 million, up 5
percent; November at 1.79 million TEU, up 1.7 percent, and December also at
1.79 million TEU, up 3.6 percent. January 2019 is forecast at 1.77 million TEU,
up 0.4 percent over January 2018.
August
was the third month in a row to set a new record for the number of containers
imported during a single month, following July’s 1.9 million TEU and June’s
1.85 million TEU. The previous record of 1.83 million TEU was set in August
2017.
While
cargo numbers do not correlate directly with sales, the record imports mirror
strong spring and summer results expected to continue through the remainder of
the year. Retail sales as calculated by NRF – excluding automobiles,
restaurants and gasoline stations – were up 4.9 percent year-over-year in July
and up 5 percent on a three-month moving average. NRF revised its annual
spending forecast this summer to say 2018 sales are now expected to be up at
least 4.5 percent over 2017 rather than the 3.8 to 4.4 percent previously
forecast.
The
first half of 2018 totaled 10.3 million TEU, an increase of 5.1 percent over
the first half of 2017. The total for 2018 is expected to reach 21.4 million
TEU, an increase of 4.4 percent over last year’s record 20.5 million TEU.
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