News / US imports hit new records in 2017, but ocean carrier indiscipline depresses rates

Despite US import volumes breaking new records last year, ocean carriers’ pricing indiscipline drove spot rates down by 30%.

According to the latest monthly Global Port Tracker (GPT) report, US imports are expected to show a 7% jump in 2017 over the previous year, to reach 20.1m teu, on the back of a “strong year” for retailers.

The report, published by the National Retail Federation (NRF) and Hackett Associates, said the major US ports handled 1.74m teu in November, up 5.8% on the same month a year ago, and December is estimated to be ahead by 2.6% at 1.6m teu, concluding a “strong holiday season”.

“Retail had a strong year, fuelled by growing wages, higher employment and a boost in consumer confidence,” said NRF vice president for supply chain and customs policy Jonathan Gold.

August was the star performer, setting an all-time US monthly import throughput record of 1.8m teu at the 12 ports covered by the data.

Moreover, 2017 was notable for including five months, of only seven on record, when imports reached 1.7m or higher.

Describing the numbers as “no minor achievement at a time when many are trying to talk down the economy”, Ben Hackett, founder of Hackett Associates, said: “On a percentage basis, 2017 was one of the strongest increases we’ve seen since the end of the great recession.”

According to GPT historical data, in 2009 US imports plunged to 12.6m teu, from 15.2m the previous year, before recovering to 15.3m teu in 2010.

Mr Hackett said he expected the growth rate would “slow down some”, but added that, based on ongoing high consumer confidence, its forecasting models “show continued growth in the coming year”.

January imports are forecast at 1.68m teu – up 0.2% on 2017 – whereas February is predicted to be up 12.6%, at 1.62m teu and March is estimated to be 2.3% lower than the previous year at 1.5m teu.

The numbers for February and March would be distorted due to the differing timings of Chinese New Year.

Looking further ahead, the authors said they expect April imports to be up 3.3% on the previous year, at 1.66m teu, with a forecast for May of 1.73m teu, an increase of 0.4%.

Meanwhile, the June 2016 expansion of the Panama Canal, enabling ships of up to 14,000 teu to transit the waterway, has boosted Asian imports for the US east coast and Gulf ports.

For example, the port authority at Houston said its 2017 import numbers were expected to be up 14% on the previous year at 2.4m teu.

Nevertheless, despite the healthy demand growth in US imports, ocean carriers failed to convert this into revenue due to a lack of rate discipline. Indeed, spot container rates from Asia tumbled for both US west coast and east ports during the year, losing around a third of their value.

And but for a strong surge in the last week of 2017, the year-on-year decline would have been worse.