With retailers looking to stockpile products ahead of impending tariffs, U.S. ports, especially New York and New Jersey, have been seeing brisk business in recent months. The Port Authority of New York and New Jersey report a 10.4% increase in volume for July over last year with 322,093 twenty-foot equivalents (TEU), reflecting units of cargo capacity, entering the port. It is the largest number in the port’s history. Total volume, including inbound and outbound containers as well as empties, rose to 622,559 TEU, the third largest on record. Overall TEU volume has risen nearly 7% compared to last year.
Elsewhere, the ports of Los Angeles and Long Beach also saw record volume in July, although overall yearly growth is down 2.6% over a record 2017. In fact, 2017 saw record-busting gains across the board with totals at all U.S. ports at 20 million TEU, up 7% over the previous year. In the south, the Port of Savannah saw even more dramatic increases in total TEU, up 12% in July and 7% for the year. And, while U.S. east coast ports have grown more rapidly than ports on the west coast, partly because of a wider Panama Canal—a third set of locks went into operation in 2016—freight rates have also risen, up to $1,222 per forty-foot equivalent unit.
According to Freightwaves.com, stockpiling of goods is in direct response to fears about a long-term trade war with the European Union, China and Canada. It also helps that retail sales are up approximately 6% so far this year. The Trump Administration has recently negotiated a pact to modify NAFTA (North American Free Trade Agreement) with Mexico but has yet to get Canada to sign on. Negotiations are ongoing.
A spokesman for global consulting firm Alix Partners, confirms that several shippers have conceded they are pushing goods into the U.S. ahead of any proposed or future tariffs that may be levied by the Trump Administration. Some experts believe the growth of the U.S. economy above 4% in the second quarter of 2018 could be directly traced to increased activity in the nation’s ports. Alix Partners also believes that once uncertainty involving tariffs is resolved, shippers will see a stabilized trade pattern and imports will drop back to normal levels.