Autumn drop in imports forecast

The import volume at the nation’s major retail container ports is expected to slow to a crawl over the summer and stall out come August and September.

Experts anticipate a 3.3 percent increase in May’s volume over the same period last year, but weak cargo increases expected over the coming months show that retailers are being cautious, said Craig Shearman, vice president of government affairs public relations for the National Retail Federation.

The late summer months could be flat compared with those in 2012, according to the monthly Global Port Tracker report released recently by the retail federation and Hackett Associates LLC, which provides consulting, research and advisory services to the international maritime industry, government agencies and international institutions.

Founder Ben Hackett said the retail story for the last half of 2013 can be told at the dock. Continued uncertainty in the economy and a lack of confidence by consumers will lead the slowing of imports.

“This translates into lower purchases, which in turn has meant that importers/ wholesalers have seen their inventories at higher levels than in previous months, thereby slowing imports,” Hackett said.

“The cargo volume does not correlate directly into sales, but it’s a good barometer of how much retailers are expecting to be able tosell,” Shearman said. “When we see a flat comparison from one year to another, it tells us that retailers are not expecting a large amount of growth.

Retailers could be anticipating another relatively slow fall and Christmas shopping season, said Michael R. Pakko, chief economist and state economic forecaster at the University of Arkansas at Little Rock. It’s their job to anticipate demand.

“On the one hand, retailers want to have sufficient quantity and variety of stock on hand to meet stronger than-expected demand should conditions improve. But during recent holiday shopping seasons, they have often been caught with excess inventory as demand failed to improve as much as anticipated,” Pakko said. “This has resulted in sales and special promotions that give consumers some welcome price opportunities, but can be damaging to the bottom line for retailers.”

Shipping volume isn’t necessarily a leading indicator of consumer demand, however, Pakko said. “Rather, the shipping volumes tell us something about retailer expectations about demand.”

Economists take several factors into account when estimating the volume of retail goods coming into the country later in the year: retail orders, contracts with different shipping companies to haul cargo, and reports on how many containers will pass through the ports.

Stores will be managing their inventory tightly, Shearman said.

“They always want to bring in enough to meet demand, but try to be very careful not to overstock and be stuck with product at the end of the year they can’t sell,” he added.

Business, Pages 63 on 05/19/2013

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