Sequestration Still Not Troubling Importers

April 9, 2013
Retail imports are expected to increase 2.7 percent in April.

While Customs officials try to minimize the impact of federal spending cuts on cargo processing, the monthly Global Port Tracker report from the National Retail Federation and Hackett Associates states that import volume at the nation’s major retail container ports should increase 2.7 percent in April over the same month last year.

“The impact of sequestration isn’t yet fully known, but Customs officials are working hard to manage their resources and keep cargo moving,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Between their efforts to avoid delays and retailers’ adjustments to compensate, we’re not expecting consumers to see any difference on store shelves at this point. We are working closely with Customs to ensure that that remains the case.”

U.S. Customs and Border Protection told businesses last week that federal “sequestration” cuts that took effect in March could still have a “serious impact” on the agency, including increased wait times for customs inspections at ports. But officials said recent passage of the Fiscal Year 2013 appropriations bill by Congress “allows CPB to mitigate to some degree the impacts.” Staff furloughs and cuts in overtime that were previously expected have not been canceled but have been put on hold.

NRF has been participating in weekly conference calls held by CPB leadership with key trade associations and making sure the agency is aware of retailers’ concerns and the impact sequestration cuts could have on the industry, consumer spending and the economy.

U.S. ports followed by Global Port Tracker handled 1.29 million Twenty-foot Equivalent Units in February, the latest month for which after-the-fact numbers are available. With February historically the slowest month of the year, the number was down 2.5 percent from January but up 17.5 percent from February 2012. One TEU is one 20-foot cargo container or its equivalent.

March was estimated at 1.28 million TEU, up 2.6 percent from a year ago. April is forecast at 1.35 million TEU, up 2.7 percent from last year; May at 1.42 million TEU, up 3.2 percent; June at 1.42 million TEU, up 1.8 percent; July at 1.45 million TEU, up 1.5 percent, and August at 1.44 million TEU, up one-quarter of 1 percent from last year.

The first six months of 2013 are expected to total 8.1 million TEU, up 4.7 percent from the first half of 2012. The total for 2012 was 15.9 million TEU, up 3.4 percent from 2011.

“Economic indicators continue to present a mixed picture of the prospects for the remainder of the year,” Hackett Associates Founder Ben Hackett said. “Sequestration does not help but on the other hand is not yet a major factor to take into account.”

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