Trade fears may be driving U.S. import volumes as US Northeast sets record

Import growth to U.S. continues unabated as Northeast volumes show one of the best levels ever.

The Ports of New York and New Jersey reported their best month ever for inbound container volumes, with one trade expert seeing the looming threat of tariffs driving some of the volume.

The third-largest container port by volume in the U.S. saw July inbound volumes reach 322,093 twenty foot equivalent (teu) in containers for July, according to the Port Authority of New York and New Jersey.

The number was 10.4% higher than a year earlier and beat the port’s previous record of 320,848 teu set in August 2017. 

Total volume, including outbound containers and empties, was 622,559 teu, the third best on record. Year-to-date, overall teu volumes into the Northeast are up 7% compared to the year earlier period. 

Ports have been reporting growth going into the third quarter, but the rate of growth has been somewhat uneven regionally.

Last week, the Port of Los Angeles reported its busiest July on record moving a total of 833,568 teu. But the year-to-date volume growth for the port shrank 2.6%. The nearby Port of Long Beach saw a softer July volume than last year. But year-to-date, the port’s total throughput is up 11% versus a year earlier.

The Port of Savannah saw a 12% year-on-year jump in July, reaching 378,767 teu in total and its second best month on record. The ongoing trend is also favorable with year-to-date teu volume up over 7%. 

As U.S. East Coast ports grow more quickly than their West Coast peers thanks to the wider Panama Canal, container rates to the U.S. East Coast have also seen sharper increases than rates to the West Coast. The newly introduced SONAR Panama spread, which measures the difference in freight rates to the two coasts, has hit $1,222 per forty foot equivalent unit.


 ( Source: SONAR )
( Source: SONAR )

The gains come as the traditional peak shipping season may have started earlier this year than in previous years due to concerns about transportation capacity

But Foster Finley, who co-leads the supply chain practice at management consulting firm AlixPartners, says his conversations with clients suggest stockpiling ahead of further tariffs.

The U.S. Trade Representative wrapped up today a series of hearings on the potential effects for tariffs on another $200 billion worth of goods the U.S. imports from China.  

“What we have picked up from speaking with shippers is that many are trying to get a last minute push of goods into the US due to fears of retaliatory or compensatory tariffs,” Finley said. “It’s been a relatively consistent theme from everyone we have spoken with.”

Retail sales have been rising  at a healthy 6% annual rate through the first half of year. But Finley says import growth is faster than actual demand, suggesting stockpiling among some shippers.

“It’s not necessarily that we’re consuming more,” Finley said. “We’ve seen a big pick-up in imports for certain regions. There is a frenetic movement of goods trying to move in the near term ahead of additional tariffs.” 

Once the uncertainty surrounding tariffs is resolved, Finley says a “more stabilized trade  pattern will emerge and imports will begin to level out.” But that might not emerge until early next year, he adds.