Why/When will import volume spike?

Retailers are predicting up to a 9% jump in US containerized import volume before new tariffs hit on December 15.  The spike in imports is due to retailers front-loading their inventories.  This is to account for depleted inventory levels in the coming holiday season.  The National Retail Federation predicts that 2019 holiday sales will increase nearly 4% over last year.

Furthermore, a large percentage of that merchandise shipped by the end of September ahead of Golden Week celebrations in China.  Due to retailers front-loading their inventories, JOC.com predicts that October import volumes will fall 5.5% over 2018 October import volumes.  However, starting in late October to early November, import volumes will recover and rates will go up as a result as shippers rush to bring more inventory into the country ahead of the December 15 tariffs.

New industry regulations effect on import volume

The National Transportation Safety Board (NTSB) recently commented on the FMCSA’s proposed changes to HOS regulations.  NTSB Chairman Robert Sumwalt made a statement indicating that the proposed changes will weaken aspects of the HOS rules.  Although the changes in the rules seek to improve driver flexibility, they also open the door to potential driver abuse and coercion.

Furthermore, a 9% increase  in freight costs is predicted to happen next year due to IMO 2020 regulations.  With many ocean carriers already implementing measures to adhere to the upcoming IMO 2020 regulations, shippers should expect to see higher fuel costs for over-the-road carriers in the upcoming holidays.

Additionally, carriers costs are higher than ever before after the turbulent year of falling rates and new regulations in trucking.  As a result, the end consumer may end up being the one who absorbs the higher supply chain costs over the upcoming holiday season.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com