Port Tracker report is bullish about 2017 U.S. retail container import growth

A solid holiday season and decent economic momentum, among other factors served as drivers for another strong month of import growth, according to the most recent edition of the Port Tracker report issued today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

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.

For November, the most recent month for which data is available, U.S.-based retail container ports covered in the report handled 1.74 million TEU (Twenty-Foot Equivalent Units). This tally represented a 1.7% decline compared to October, with most holiday merchandise having already been in the U.S. by then, the report said. And it is up 5.8% compared to November 2016. October’s 1.77 million TEU was 0.3% ahead of September’s 1.76 million TEU and below August’s 1.8 million TEU, which is the highest-volume import month recorded since the NRF started tracking imports in 2000 and tops the previous record set one month earlier in July of 1.78 million TEU. Prior to July and August, the previous high was 1.73 million TEU from March 2015.

“Retail had a strong year fueled by growing wages, higher employment and a boost in consumer confidence,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Retailers imported more merchandise than ever to meet demand for quality products at affordable prices, and growth is expected to continue in the year ahead.”

While Gold expressed optimism, he noted in the previous report that that the currently strong market environment could be hindered should retailers be negatively impacted by the United States were to exit the North American Free Trade Agreement (NAFTA) or were to engage in forms of anti-trade policy that does not recognize the increased employment and other contributions imports make to the nation’s economy. And he noted that even through the White House continues to talk about taking protectionist trade measures, concerns remain about what may in store for 2018 and beyond as well.

Port Tracker expects December to come in at 1.6 million TEU, which would mark a 2.6% annual gain, with all of 2017 pegged at 20.1 million TEU. This would mark a new all-time record, ahead of 2016’s 18.8 million TEU by 7%. What’s more, 2017 included five of only seven months on record to reach 1.7 million TEU or more.

Looking at the first quarter, the report estimates January will be up 0.2% annually at 1.68 million TEU, while February is projected to rise 12.6% annually to 1.62 million TEU. March is forecasted to decline 2.3% to 1.5 million TEU. The report observed that the February and March figures are “skewed,” due to Asian factories shutting down for the Lunar New Year.

NRF issued a late 2017 forecast indicating that 2017 retail sales were expected to be up between 3.2%-3.8%, with 2017 holiday sales, which are comprised of retail sales for November and December, expected to be up between 3.6%-4%.

Hackett Associates Founder Ben Hackett wrote in the report that buoyed by “historically strong levels” of consumer confidence, the ongoing decline in the retail inventory-to-sales ratio, and annual gains in industrial production, and e-commerce sales are serving as levers for total 2017 import volume to be up around 7.5%, when final figures are available.

“That would be the best showing since 2010 and not a mean achievement at a time when many are trying to talk down the economy,” he wrote. “Many institutions are busy revising their forecasts upward, particularly as the European Union has finally come out of the self- imposed economic stagnation seen since 2011. Given that level of confidence and strong import trade flows to both the consumer and industrial sectors, our models project continued growth this year, although not at the levels of 2017.”