Holiday season shipment growth is intact, according to Port Tracker report

Gains in United States-bound retail imports are expected with the holiday shopping season now officially underway, 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.

“Retailers are importing more during the holidays this year than last year and that can only mean one thing – they expect to sell more,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Most of the holiday merchandise is already here, but retailers are still restocking to be sure shoppers will have a broad and deep selection as they hit the stores over the next several weeks.”

For September, the most recent month for which “after the fact” data is available, total volume was 1.6 million Twenty-Foot Equivalent Units (TEU), which marked a 6.6 percent decline from August, which is the busiest month of the year, and was also down 1.6 percent annually.

October saw a return to growth, coming in at an estimated 1.67 million TEU for a 7.5 percent annual gain, with November pegged at 1.54 million TEU for a 4.4 percent annual increase. December is expected to reach 1.5 million TEU for a 4.5 percent increase compared to December 2015, and January and February at 1.54 million TEU and 1.49 million TEU, respectively, are expected to head up 3.6 percent and down 3.2 percent.

These projections follow the NRF’s recent forecast for holiday sales, which are defined as the sales for November and December, to be up 3.6 percent at $655.8 billion. And for all of 2016, the Port Tracker report said total 2016 volume is expected to be up 2.2 percent at 18.6 million TEU, which would mark a lower annual gain than 2015’s 5.4 percent gain over 2014 at 18.2 million TEU. The report also noted that there were 9 million TEU for the first half of 2016, which was a 1.6 percent annual gain compared to the same period a year ago.

Hackett Associates Founder Ben Hackett observed in the report that even with recent good economic news, North American-bound imports are growing at less than 2 percent, with his firm’s model expecting import growth to not exceed 1.8 percent, due to a decline of West Coast imports, with the caveat that it is not clear if that is due to the aftermath of the recent bankruptcy of Hanjin or instead a sign of weakening demand.

“There is some concern as to whether the 1.8 percent import growth will be achieved,” said Hackett in an interview. “Looking at the year-to-date figures, there is a need for November to be really strong.”

The Hanjin factor, he said, should not play a material role in shipment levels going forward, as most of the backlog was cleared out by the end of October, with its shipments absorbed by other carriers.

Still high but mildly decreasing inventory levels also remain concerning, explained Hackett.

“There is still a long way to go there,” he said.  “But part of that may be because inventories have been so high for so long, coupled with importers like Amazon and others setting up distribution centers closer to the markets they serve. They are also bringing cargo in earlier in the year so it is sitting in stock as importers don’t want to get burned again as they have in past years. That is definitely part of it as they can be prepared for any surge in purchases by doing that.”