Outlook for U.S. container imports back to normal levels after 2018’s pre-tariff front loading, but with this administration, you never know.
U.S. container imports continue to surprise, both to the upside and the downside, amid the uncertainty surrounding government trade policy. As such, shippers and carriers have to expect the unexpected going into 2019.
Nearly a year after President Donald Trump ordered the first round of U.S. tariffs on Chinese goods, the world’s two largest economies remain at a standoff on how to resolve a trade fight that includes $267 billion in goods from China and $60 billion in goods from the U.S.
After a recent visit by China’s vice premier to the U.S., the White House said “significant work” remains, with the only promise made to keep talks going.
Closer to home, Nafta 2.0 is still not the law of the land as Democrat representatives push for better labor and environmental protections. Add to that a brewing trade war with the European Union as the U.S. plans to move ahead with tariffs on $11 billion in goods from its second largest trading partner over a dispute regarding aircraft subsidies.
With the economy still expected to show decent growth, the National Retail Federation’s latest forecast for U.S. retail imports showed average annual growth of 3.6 percent through August, about par with other forecasts for the level of world trade.
But those forecasts can be more variable than ever, making it ever more difficult for logistics providers and carriers to adequately plan capacity. The National Retail Federation’s data on container imports were above forecasts in five of the seven-month stretch between September and March. November imports hit the mark, while February imports come in below forecasts.
Contending with these challenges is a key challenge for members of the Coalition of New England Companies for Trade (CONECT), which will convene this week in Rhode Island for the 23rd annual Trade and Transportation conference.
The six New England states represented on CONECT’s board account for about $85 billion in imports last year, and $58 billion in exports. Among its corporate members are some of the largest shippers in the market, including Wayfair (NYSE: W), BJ’s Wholesale Club (NYSE: BJ) and Boston Scientific (NYSE: BSX).
Speaking at a regional conference last year, CONECT’s co-founder Peter Friedman addressed how tariffs scrambled every link in the supply chain: U.S. buyers faced the prospect of finding new suppliers, Chinese companies lost long-standing customers, and ocean carriers had to add capacity rapidly to handle the 2018 freight surge, and just as quickly withdraw it as rates fell in 2019.
“We do know there’s a lot of dislocation from these China tariffs,” Freidman said.
Ahead of the new batch of representatives coming into Congress and the many candidates declaring their intent for the White House, Friedman said at the time that trade issues may become a way for politicians to further separate themselves from the rest of the pack.
“Trade is always going to be a flash point,” he said. But it could become a “partisan flash point between Democrats and Republicans.”
IMO starts data standard for ship-to-shore notifications
Ships will be required to relay vessel and crew particulars in standard format. (Maritime Executive)
Futures products coming for IMO 2020 fuel prices
Hedging products for an array of global marine fuel prices to be launched next month. (Marine Link)
Houston Ship Channel moves again after fires
Three-day shutdown after chemical fire hit the U.S.’ busiest channel for tankers. (Reuters)
Toll Global Logistics plans to shut some U.S. offices
Global forwarding business plans to shutter in secondary markets. (The Loadstar)
