Ahead of Tariffs, Retail Sets Multiple Import Records, Says NRF
Retail has had a relatively strong year, so to speak. But that’s not the only reason that store owners are rushing to bring in additional merchandise. According to the National Retail Federation, the number of imports at the nation’s major retail container ports have set two new records this summer and are expected to set another in August—and it has everything to do with proposed tariffs on products from China.
Citing data from their monthly Global Port Tracker report, NRF found that ports covered by the report handled some 1.85 million Twenty-Foot Equivalent Units (TEUs) in June, the latest month for which after-the-fact numbers are available. That was up 1.6 percent from May, and 7.8 percent year-over-year. Additionally, July is reportedly on track to hit 1.88 million TEUs, up 4.4 percent year-over-year; August is forecast at 1.91 million TEUs, up 4.4 percent. The remaining months of the year were all projected to be up at least 1.8 percent as well.
“Tariffs on most consumer products have yet to take effect but retailers appear to be getting prepared before that can happen,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “We’re seeing new record levels every month this summer. Much of that is to meet consumer demand as tax reform and a thriving economy drive retail sales, but part of it seems to be concern over what’s to come. The good news for consumers is that avoiding tariffs holds off price increases that will inevitably come if the reckless and misguided trade war is allowed to continue.”
The June TEU total set a new record for the number of containers imported during a single month, which was previously set in August 2017 with 1.83 million. If the projected numbers hold, the record could again be broken in July, and again in August. All of that said, as expected with the implementation of the proposed tariffs, TEU figures are expected to take a significant hit as the calendar flips to 2019.
“Global Port Tracker has only marginally downgraded imports for 2018 but we expect to see a larger downturn going into 2019 resulting from the trade war as well as an anticipated slowing of the economy,” Hackett Associates Founder Ben Hackett said. Hackett assists NRF in collecting data for the Global Port Tracker report. “The volatility and non-fact-based decisions coming from Washington have created uncertainty.”
NRF explained that cargo numbers don’t necessarily correlate directly with sales, though the record imports do come at a time when retailers are seeing strong results in the spring and summer that are expected to continue through the remainder of the year. Retail sales—excluding automobile, restaurants, and gasoline—were up 4.2 percent year-over-year through June, NRF reported. The association expects 2018 total sales will be up somewhere between 3.8 and 4.4 percent over 2017.