Port Tracker report points to one new record, with one more maybe on the way

Records are made to be broken for many different things, and in the case of United States-bound retail container volumes, records are being set in recent months, according to the most recent edition of the Port Tracker report issued this week 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.

“Consumers are buying more, and retailers are scrambling to import more merchandise to keep up with the demand,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Docks have been busier than ever as ships unload cargo headed for store shelves, and that’s a good sign both for retail sales and the nation’s economy.”

For July, the most recent month for which data is available, ports covered in the report handled 1.78 million TEU (Twenty-Foot Equivalent Units), which is 5% higher than June and up 9.2% annually. The report said this now stands as the highest monthly volume recorded going back to 2000, when NRF started tracking imports, beating March 2015’s 1.73 million TEU.

For August, the report is now calling for a 0.1% annual decline at 1.71 million TEU, which is shy of a previous estimate made last month of 1.75 million, a figure last month’s report indicated would be a new monthly record.

September is pegged at 1.67 million TEU for a 4.7% annual gain, and October is expected to be up 2% at 1.7 million TEU. November and December are expected to be down 2.3% and up 0.5%, respectively at 1.61 million TEU and 1.58 million TEU.

Even with growth levels down from the first half of 2017, the report stated that 2017 is expected to be up 4.7% at 19.7 million TEU, which would outpace the previous record of 18.8 million TEU set in 2016 and is in line with 2016’s 3.1% annual gain over 2015.

This growth is coming even though the NRF this week lowered its estimates for 2017 retail sales to a range of 3.2%-3.8% from a previous range of 3.7%-4.2%.

Hackett Associates Founder Ben Hackett wrote in the report that it is not prudent to simply expect volumes to continue growing at current levels.

“The United States economy has experienced a long, sustained period of growth beyond any seen in the last few decades,” he wrote. “Admittedly the growth has been mostly lackluster, but 2017 is turning out to be a bumper year causing a sense of growth that is unstoppable. “Taking this view is risky, however. As we look forward, our models are projecting a slowdown. The positive takeaway is that this is a slowdown in growth, not an actual reduction in volume.”

Hackett added that ships arriving at ports covered in the report are full, but it could be related to capacity management as a direct outcome of the three new super alliances that control the East-West trade routes, which he said provides a rosy outlook at a time when significant new capacity is arriving on the scene.

“The optimism expressed by some commentators may be short-lived,” he said.

The report also observed that Hurricane Harvey quelled Gulf Coast cargo levels, with Hurricane Irma likely to have the same impact in Florida, although neither event is expected to impact volumes.