Posted on November 27, 2018
The Port of Virginia saw a 17 percent increase in import volumes from September to October.
Down in Georgia – another major East Coast seaport – imports jumped 15 percent. In Charleston, it was nearly 14 percent. At the port in Los Angeles, it was 10 percent.
There are common ties to these double digit spikes. It’s peak season for retail. The economy is strong.
But another factor is playing a role: cargo owners are getting shipments in now ahead of Jan. 1, port officials and experts say, to avoid the new round of tariffs implemented by President Donald Trump’s administration.
“Being an economy with a large consumer element, the U.S. economic growth is pulling in imports, boosted by the tariff deadline worries,” Neil Davidson, a senior ports and terminals analyst at London-based Drewry Maritime Advisors, said in an email.
Trump already put 10 percent tariffs on roughly $200 billion in Chinese goods and has proposed jumping that number to 25 percent on Jan. 1.
Virginia has seen strong import volumes over the last few months, perhaps also driven by cargo owners preparing for the busy retail season. September was the only month this summer that saw a decrease when compared to the same month last year.
July saw the highest spike of 9 percent with a total of 120,132 imported containers, compared to 109,215 last July. October has been this year’s biggest month so far with 127,677 imported containers.
But this sort of cargo rush brings another worry for ports like Virginia. What’s going to happen in the first quarter of 2019?
“There is a grave concern there is going to be a drop off after that,” Tom Capozzi, the chief sales officer for the Port of Virginia, said at the port’s November board meeting.
How much of a drop off is tough to quantify. While the rest of 2018 is expected be high, 2019 will not be the same.
“This is where the trade wars and the tariffs are going to start to present themselves as a real risk to our port,” said John F. Reinhart, CEO and executive director of the Virginia Port Authority during the board meeting. He was referring to the start of 2019.
Forecasts had ocean trade growing by 4 percent next year, but that figure was adjusted down to 2 percent as the impending tariff deadline approached.
The local impact could mean big decreases in overall cargo moved at the Port of Virginia.
“We look at our business – we could be at risk for 5 percent of our volumes next year,” Reinhart told his board.
Reinhart said the port is hopeful some sort of agreement will help tamp down the trade war.
“Our hope is that there can be an agreement reached prior to Jan. 1 that allows for normal trade,” port spokesman Joe Harris said Friday.
Meanwhile, Los Angeles, Savannah, Charleston and Virginia all reported record Octobers.
Charleston moved 217,035 TEUs, or the standard industry measurement for 20-foot containers.
The Port of Savannah moved 413,800 containers; Virginia moved 270,538.
Source: The Virginian-Pilot
