Now that the impact of federal budget sequestration on the United States Customs and Border Protection (CBP) is on hold, the Port Tracker report from the National Retail Federation and Hackett Associates is calling for gains in April United States-bound import cargo levels.
Had the sequestration cuts taken effect it would have stood to have a significant impact on CBP and subsequently port efficiency on multiple fronts, including: requiring all CBP employees to be furloughed up to 14 days during the remainder of fiscal year 2013 or one day per pay period from early-to-mid April through September 30 and a subsequent ten percent pay cut; reduced staffing at U.S. points of entry; make four to five hour wait times commonplace and cause the busiest ports to face gridlock situations at peak periods and lead to long delays in U.S. commercial lanes as cargo waits to enter U.S. Commerce; and reduce inspectional overtime at CBP by $37.5 million and also result in longer wait times at points of entry. But these actions are now on hold—for now—as “CBP has postponed the elimination of furloughs to its employees and the elimination of overtime,” which came as a result of the Consolidated and Further Continuing Appropriations Act, 2013, which was signed into law earlier this month, according to a Washington Post report.
The report noted that CBP told businesses last week that federal “sequestration” cuts that took effect in March could still have a “serious impact” on the agency, including increased wait times for customs inspections at ports.
The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and the recent addition of Fort Lauerdale, Fla.-based Port Everglades.
The Port Tracker report said 1.29 million TEU (Twenty-foot Equivalent Units) were handled in February—which is historically the slowest month of the year for imports— for the ports followed by Port Tracker, marking a 2.5 percent decline from January and a 17.5 percent increase over February 2012. This is the most recent month for which data is available.
The report is calling for the first six months of 2013 to hit 8.1 million TEU, which would be a 4.7 percent annual improvement. For all of 2012, the total TEU count was 15.9 million TEU, marking a 3.4 percent annual bump. The 2011 total was 14.8 million TEU, which was up 0.4 percent over 14.75 million TEU in 2010. Volume in 2010 was up 16 percent compared to a dismal 2009. The 12.7 million TEU shipped in 2009 was the lowest annual tally since 2003.
Port Tracker estimates March volumes to be at 1.28 million TEU for a 2.6 percent annual gain. April is expected to rise 2.7 percent to 1.35 million TEU, and May is expected to be up 0.25 percent at 1.44 million TEU.
At a time when the housing sector is recovering, with related sales of household goods on the rise, there still remains a fair amount of consumer concern, due to things like unemployment, the aftereffect of the fiscal cliff-induced payroll tax hike earlier this year and consumers exercising caution when making spending decisions. All of these things can impact import volume numbers to some degree.
“Even with these things happening, we still feel good about our forecast for the coming months,” said Jon Gold, NRF Vice President for Customs and Supply Chain Policy, in an interview. “But there are clearly a number of factors that could come into play and send those numbers down, too. We are really hoping members of Congress will implement some pro-growth strategies that will help to bolster the economy to help us get through these tough times.”
Hackett Associates Founder Ben Hackett said in the report that economic indicators continue to present a mixed picture of the prospects for the remainder of the year, adding that sequestration does not help but on the other hand is not yet a major factor to take into account.
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