Imports expected to grow in first half after tumultuous first quarter

Date : 2016-03-25  | From : joc.com

Containerized imports at U.S. ports are projected to increase by double digits in January and February compared to the same months last year, when dozens of vessels were stranded outside of West Coast ports due to labor problems.

Although container volumes will drop noticeably in March compared to March 2015, Global Port Tracker projects overall gains of 4.5 percent in containerized imports during the first half of the year.

“Retailers are carefully managing their inventories, but still need to stock up on seasonal goods for spring and summer,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. The NRF and Hackett Associates publish the Global Port Tracker each month, which tracks containerized imports at all of the major gateways.

Comparing imports during the first three months of 2016 with the same period last year will not be a normal exercise in measuring trade flows because West Coast ports were in gridlock in early 2015 during the coastwide contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association. The ILWU engaged in work slowdowns at West Coast gateways, and employers responded by cutting back on night and weekend work, which compounded the port congestion problems.

Numbers posted on the PMA website show that January and February were by far the West Coast ports’ slowest months of the year for containerized imports. In January 2015, imports totaled 591,994 twenty-foot-equivalent units, compared to 831,624 TEUs in January 2014. Imports in February totaled 577,754 TEUs, the lowest tally of the year, compared to 725,535 TEUs in February 2014.

The ILWU and PMA reached a tentative contract agreement on Feb. 20, and vessels that had been idled outside the ports were worked at a furious pace. March turned out to be the busiest month of 2015, with imports totaling 1,030,847 TEUs, according to the PMA.

As a result of this volatility, Global Port Tracker is projecting large swings in year-over-year import volumes during the first three months of 2016. Imports are forecast to increase 18.3 percent year-over-year in January and 16.2 percent in February. However, containerized imports in March will drop 22.4 percent compared to March 2015, Global Port Tracker projected.

Trade flows should then return to normal patterns. Imports in April are projected to be down 1.2 percent year-over-year. May will see a drop of 2.6 percent and June a drop of 1.2 percent, but due to the large increases early in the year, the first half of 2016 should experience a 4.5 percent increase in imports over the same period last year, the report stated.

On a somber note, Hackett Associates founder Ben Hackett said economic weakness in a number of nations calls for aggressive actions by governments if 2016 is to experience overall growth.

“Governments around the globe need to support economic policy that is pro-growth and avoid actions that get in the way of the business community,” he said. “What all the economies of the world need is stimulus to encourage consumer spending and to increase business expansion.”

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