Port Tracker report calls for records even with growth rates tempered

Even with a somewhat reduced growth forecast, the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and maritime consultancy Hackett Associates stated that United States-bound retail container volumes call for an all-time volume high by the end of this summer.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and Fort Lauderdale, Fla.-based Port Everglades. Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

“Year-over-year comparisons are slowing down but that’s largely because we had some unusual numbers early this year and strong volume in the second half of last year,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Despite that, we’re expecting some of the largest import volumes we’ve ever seen, and that’s because retailers are responding to strong consumer demand.”

For April, the most recent month for which data is available, ports covered in the report handled 1.61 million TEU (Twenty-Foot Equivalent Units), which marks an 11.3% annual gain and a 4.8% increase over March. The report said that the annual increase in April, as well as March’s 15.8% increase were impacted by what it said were unusual anomalies, due to the timing of the Lunar New Year and affected production at factories in Asia.

May is estimated at 1.69 million TEU for a 3.9% annual increase, and June is pegged at 1.64 million TEU for a 4.1% annual hike. July and August are projected to be up 3.5% and 1.6% at 1.68 million TEU and 1.74 million TEU, respectively. And September and October are calling for 2.8% and 1.3% gains to 1.64 million TEU and 1.69 million TEU, respectively.

The report’s authors said that should August reach its estimated volume it would stand as the single highest monthly volume going back to 2000, when NRF initially started covering import data and be ahead of the most recent high of 1.73 million TEU, which was recorded in May 2015. What’s more, the report added that May and October would mark two of the five highest monthly volumes ever recorded, as per the report’s historical data.

The first half forecast for imports for the first half of 2017 was mildly upgraded from 9.5 million TEU to 9.6 million TEU, which is a 6.4% increase over the first half of 2016.

The report also noted that these growth estimates match up well with the NRF’s projection of retail sales rising between 3.7 and 4.2% in 2017, excluding automobiles, gasoline, and restaurants, compared to 2016. It explained that these gains are expected to be paced by the combination of job and income growth and low debt. And it added that cargo volume does not correlate directly with sales, due to the fact that only the number of containers is counted and not the value of cargo inside, explaining that it still provides a barometer of retailers’ expectations.

Hackett Associates Founder Ben Hackett wrote in the report that part of the reason for the lower-than-expected growth in this report is due to continuing slow growth in the Western Hemisphere.

“The probability is relatively high that expansion of the U.S. economy will remain under 3 percent this year,” he wrote. “Retail sales continue to hold up but nothing out of Washington suggests an impetus to growth.”

Hackett also observed that Chinese industrial output undershot expectations in April and May and is not expected to look any better once its numbers come out, continuing a trend that has seen fears over the Chinese economy.

Taking a general view of the global container shipping sector, Hackett stressed that 2017 may not be the strong year that many stakeholders were initially expecting, due to freight rates not rising as much as expected and capacity still outpacing demand, which is being reflected in daily charter rates for container ships, or “a case of too many chasing too few.”