Steady Import Growth in America

Steady Import Growth in America

There’s no doubt that Donald Trump’s election victory has got some global markets twitching, with many plummeting in value overnight. Their main cause for concern is Trump’s seeming conviction in an anti-free trade policy, and what this will mean for America’s global trading and supply chains.

Warnings from analysts, and container shipping experts Drewry, state that Donald Trump would have no qualms about putting a stop to current trade agreements. There’s also the worry of retaliation from countries who import goods from America, as a consequence of Trump’s suggestion that he could add a tariff to US imports. Neither of these would be a positive step forward for container trade in and out of America.

However, in a way, this upset has come at what should be a good time of the year for retail. With Christmas looming, demand for goods remains high, and should do for the short term, with predictions remaining positive. Traders are continuing negotiations with suppliers buoyed with seasonal confidence, despite warnings that the longer term forecast is more uncertain.

With demand for goods still high, particularly those of a seasonal variety, ports are handling an increased amount of business. The Global Port Tracker monthly report, published by the National Retail Federation in association with Hackett Associates, predicted that the major ports of America would see an increase of 4.4% imports compared with the same period last year, with volumes predicted to show a 4.5% increase in December.

It’s also great news on seasonal sales, with the National Retail Federation predicting a 3.6% rise when compared to last year, giving a possible total of $655.8 billion. While you obviously cannot correlate cargo volume to sales, as only a quantity of containers and not the value of the goods inside is surveyed, it still gives retailers an idea of what’s coming up.

The ripple effect from America has spread across the world. Retail outlets know that sales will be good this year, and have imported even more than in previous years. With a bumper year predicted, some are even importing top up stock, keeping importers busy. The so called Hanjin Effect, and the run up to the holiday season, meant that the average price per FEU on routes between Far East Asia and North America went up an impressive 47% during the third quarter. Xeneta said that a cost of $1240 at the start of the quarter was $1826 by the end of it. Shanghai’s Containerised Freight Index said that as of November 4th, rates to the west coast of America from Shanghai were $1990 for each FEU.

Despite all the positivity, Drewry fears that the bubble will soon burst, leaving a dreary long term picture, which may or may not be a result of the election of Donald Trump as US President. At the end of October, Drewry’s prediction was that both America’s imports and exports would suffer, regardless of whether Clinton or Trump won, as both of them were emphasising the importance of keeping all aspects of trade within American borders, instead of trading internationally. This policy would have seen a negative impact on container trade to and from America. Thankfully, the short term figures seem to show that importing to the USA still looks a good prospect.

In ports which are monitored by Global Port Tracker, September’s statistics showed that there were 1.6million TEU. It was a decrease of 6.6% from August, which is historically the busiest month, and also a decrease of 1.6% from September last year. October’s figures were much more reassuring. 1.67 TEU was recorded, an increase of 7.5% on the same period last year. November also looks to be a good month, with a prediction of 1.54 million TEU, and December predicted to be 1.5 million TEU. These are increases of 4.4% and 4.5% on last year’s figures respectively.

When it comes to next calendar year, there are also positive predictions in the pipeline. If all goes to plan, January 2017 should show a 3.6% gain.

Hackett Associates’ own Ben Hackett said that he was pleased with the recent growth, but all in all, it wasn’t a huge explosion in figures. His prediction is that imports will only increase around 2% this year. Remaining positive, he said that this modest level of growth should be easy to sustain during the first part of 2017.