Shippers responded to the last round of tariff increases on imports from China by front loading containers into U.S. ports in July, the National Retail Federation said. After bottoming out this month, the NRF forecasts container volumes will rise in October and peak in November.
July’s volume of 1.96 million twenty-foot equivalent units (TEUs) was 100,000 TEU better than the last forecast estimate for the month and the biggest upside surprise to estimated volumes since January 2019.
The Port of New York and New Jersey is one beneficiary of the front loading as it reported July import volumes rising 4.6% to 336,972 TEUs. Through July, New York-New Jersey is the second busiest U.S. port in terms of total volume, handling 4.315 million TEUs versus 4.307 million at the Port of Long Beach.
August import volumes are expected to reach 1.96 million TEUs, up just under 2% from a year earlier. The largest U.S. port, Los Angeles, reported better growth with import containers rising 4% in August. Through the same period, imports are running about 3% higher than a year ago.
The July bump in volumes came as the U.S. Trade Representative started the first of two batches of tariffs on consumer goods, with $110 billion in goods getting excised at 15% starting September 1. Another $160 billion in imports is targeted for a December 15 increase.
A separate batch of tariffs will increase the tariff on $250 billion in Chinese goods to 30% from 25%, the NRF said.
“Retailers are still trying to minimize the impact of the trade war on consumers by bringing in as much merchandise as they can before each new round of tariffs takes effect and drives up prices,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold.
After the tariffs take effect, imports are expected to hit a five-month low of 1.85 million before hitting another high in November of 1.97 million TEUs.
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