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Retailers Take Stock as they Restock for the Holidays

Dec. 11, 2017
Traffic at the major U.S. retail container ports in 2017 should close the year up more than 6% over 2016.

Imports at the nation’s major retail container ports are expected to increase 1.5% this month over the same time last year, according to the monthly Global Port Tracker report from the National Retail Federation and consulting firm Hackett Associates. The year, which included five of the seven busiest months for imports on record, should end with a healthy 6.4% increase over 2016.

“Retailers are doing last-minute restocking as consumers head toward the finish line of the shopping season, but the majority of holiday merchandise is already in the country and ports are beginning to quiet down,” says Jonathan Gold, NRF’s vice president for supply chain and customs policy. “With tax cuts that will leave more money in shoppers’ pockets in the headlines and consumer confidence high, all signs are that this has been a strong holiday season.”

Gold adds, however, that retailers’ ability to provide consumers with quality products at affordable prices could be threatened if the U.S. pulls out of the North American Free Trade Agreement (NAFTA) or engages in other anti-trade policy that fails to recognize the increased employment and other contributions imports make to the nation’s economy.

“Despite constant threats from the administration regarding trade, especially free trade agreements, imports have been riding high,” Gold says. “Concerns continue about what will happen in 2018 and beyond.”

Ports covered in the analysis handled 1.77 million twenty-foot equivalent units (TEUs) in October, the latest month for which after-the-fact numbers are available. That was up 0.3% from September and up 5.9% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.

November was estimated at 1.64 million TEUs, down 0.3% from last year, and December is forecast at 1.6 million TEUs, up 1.5%.

The total for 2017 is expected to come to 20 million TEUs, topping last year’s previous record of 18.8 million TEUs by 6.4%. That compares with 2016’s 3.1% increase over 2015.

The year set an all-time monthly record of 1.8 million TEUs in August, and included five of only seven months when imports have hit 1.7 million TEUs or higher.

January 2018 is forecast at 1.67 million TEUs, down 0.5% from January 2017; February at 1.6 million TEUs, up 11.6% from last year; March at 1.5 million TEUs, down 2%, and April at 1.66 million TEUs, up 3.6%. The February and March percentages are skewed because of changes in when Asian factories close for Lunar New Year each year.

The import numbers come as NRF is forecasting that 2017 retail sales will grow between 3.2 and 3.8% over 2016 and that this year’s holiday sales will grow between 3.6 and 4%. Cargo volume does not correlate directly with sales because only the number of containers is counted, not the value of the cargo inside, but nonetheless provides a barometer of retailers’ expectations.

“As we close out 2017, we feel very good about the events of the year,” says Ben Hackett, founder of Hackett Associates. “We expect the coming six months to continue to grow, although at a reduced rate on a year-on-year basis. The second half of 2018 will be weaker than the first half, but recession is not on the horizon.”

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