Record retail import volumes expected in July and August

The National Retail Federation said this week July and August are shaping up to be two of the busiest months on record for the nation’s major retail container ports, as merchants stock up for back-to-school and early holiday seasons.

“We’re expecting retailers to import some of the largest volumes of merchandise ever,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “That’s a good indicator of what could be ahead for consumer demand and retail sales, and it’s a sign that retail is going strong despite what you might read in the headlines.”

“Regardless of whether the sales come in their stores or through their websites, retailers see that consumers are buying more this year and they’re importing the goods needed to meet the demand,” he added.

The Global Port Tracker report compiled by Hackett & Associates found ports handled 1.72 million containers (Twenty-foot Equivalent Units – TEU) in May, which was the last month actual numbers are available. May port volume rose 7.3% from April and was up 6.2% year-over-year.

Hackett estimates June volume at 1.66 million containers, up 5.3% from a year ago. For the first half of this year the report projects import volume to rise 7.1% from the same period last year. The group forecasts first half imports to total 9.63 million containers. There is no way to know the value of the merchandise in these containers but tracking the volume is one way analysts can forecast more accurate retail sales expectations.

The back half of this year also looks to be solid in terms of import volumes with July forecast at 1.71 million containers, which would be 5.1% more than last year. August import volume is projected at 1.75 million containers, a gain of 2.2% and that would be the highest monthly volume on record since the report began in 2000.

The trade group also said May — along with projected July and August volumes — represent three of the six busiest months in the report’s 17-year history. September and October import volumes are also forecast higher than a year ago rising 4.3% and 2.2%, respectively. November import volume is expected to be down 2.7% from last year, the report indicated.

NRF has forecast 2017 retail sales — which excludes automobiles, gasoline and restaurants — will increase between 3.7% and 4.2% from a year ago. The trade group cites solid job and income growth coupled with low overall consumer debt as the main reasons for the increased sales projections.

“The increases in imports have come despite threats by the Trump administration to impose new limits on international trade,” said economist Ben Hackett.” Some actions to date appear to have alienated traditional allies and are causing them to work more closely together, leaving the United States on the sidelines.”

Hackett also said President Donald Trump’s “America First” agenda could work against continued economic growth for U.S. importers and exporters if the U.S. is seen a protectionist nation by our key trading partners.

“Prospects for consumer spending are straightforward — more jobs and more income will result in more spending,” NRF Chief Economist Jack Kleinhenz said. “Regardless of sentiment, the pace of wage growth and job creation dictate spending … It seems unlikely that businesses will notably increase investment until tax reform and trade policies are well-defined.

“It is clear that online sales will continue to expand in 2017 and provide growth for the retail industry,” he added. “But it is important to realize that virtually major retailer sells online and many of those sales will be made by discount stores, department stores and other traditional retailers. Retailers sell to consumers however they want to buy, whether it’s in-store, online or mobile.”

RETAIL IMPORT TRENDS
U.S. Retail Imports by containers
June
2017: 1.66 million
2016: 1.57 million
up 5.39%

May
2017: 1.69 million
2016: 1.62 million
up 4.32%

April
2017: 1.61 million
2016: 1.44 million
up 11.8%

March
2017: 1.53 million
2016: 1.32 million
up 15.9%

February
2017: 1.43 million
2016: 1.54 million
down 7.14%

January
2017: 1.67 million
2016: 1.49 million
up 12.08%