U.S. importers are on pace to bring more goods through the country's seaports this summer than last, building up inventories from shoes to steel in a sign of growing hopes that the economy will pick up steam this fall.
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Cargo imports surged at U.S. seaports in June, with gateways on the Pacific and Atlantic coasts reporting record monthly volumes at the start of the shipping industry's peak season for demand, and a retail group predicts that the inbound volume will accelerate in the coming months, a contrast with depressed shipping demand last year.
The neighboring ports of Los Angeles and Long Beach last month handled a combined 707,600 imported loaded 20-foot equivalent units, or TEUs, a standard measure for container cargo. That was 5.7% more than the same month last year.
Container imports rose 5.1% at the Port of Oakland last month, to 80,253 TEUs, while inbound volume reported by the Virginia Port Authority was up 10% to 103,006 TEUs.
The latest monthly Global Port Tracker report, issued by National Retail Federation and Hackett Associates LLC, estimates total container import volume across major U.S. ports of 1.66 million TEUs in June, up 5.3% from a year ago. The report projected that monthly volumes will continue to expand year-over-year through October, with more than 1.7 million import TEUs expected in July and nearly 1.8 million TEUs in August.
Portland, Ore.-based freight forwarder OIA Global, which handles goods for athletic and outdoor retailers, says the prospect of further deregulation under the Trump administration has driven optimism among its clients.
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"It's a very positive business environment," said Jerry Levy of OIA Global, adding that many of the firm's customers are restocking inventories as they enter the busier season. "The volumes are well ahead of last year...People are very optimistic on our economy right now."
The volume increases came as China's exports rose 11.3% year over year, marking the fourth month in a row of gains. June also saw demand improving for trucking and logistics services in the U.S., as spot rates rose fueling hopes for a broader freight recovery.
Still, some analysts say concerns over the threat of new import tariffs from President Donald Trump's administration may also be driving some of the import growth as companies try to get ahead of potential new constraints.
Chris Rogers, an analyst with trade data firm Panjiva, said there has been significant growth since January in import segments that face possible tariff restrictions. Shipments of steel were up 26.5% and automotive-industry imports -- including cars and parts -- were up 8.9% in June.
"We have a very high level of uncertainty," Mr. Rogers said. "If Trump moves this month on steel, that's a sign to everybody who is an exporter to the U.S. that when actions happen, they happen quickly -- you should get in while you can." But, he added, "If by this time next month nothing has happened on steel and automobiles, they might all say, let's get on with it and go back to business as usual."
That could leave businesses that stocked up in June with higher inventories than they need in the coming months.
According to the Commerce Department, consumer spending at U.S. retailers declined for the second straight month in June. Researchers at the University of Michigan reported last week a decline in the consumer-sentiment index -- the second straight monthly decline.
"Certainly in selected industries I'd say there's a very real chance of an oversupply of inventory," Mr. Rogers said.
Write to Erica E. Phillips at email@example.com
(END) Dow Jones Newswires
July 17, 2017 17:04 ET (21:04 GMT)