Logistics Report: Concern over tariffs caused companies to buy more inventory early. Now shipping imports have decreased as consumer spending is less than previous years.
U.S. logistics operators say shipping imports are waning heading into the holidays in a sign that companies may be paring down inventories after stocking up heavily to get goods in place ahead of new tariffs.
“There was a larger inventory pull-forward earlier this year when people were concerned about the tariffs,” David Yeager, chief executive of transportation company Hub Group Inc., said in an interview. “There’s not as much freight demand at this point in time…People are burning off inventory.”
Mr. Yeager said Hub Group, whose customers include large retailers, is seeing lower volumes than its customers had projected. Those forecasts had indicated the 2019 peak might be on par with 2017, though lower than last year, when imports into Southern California and some large East Coast ports surged as retailers and manufacturers pulled orders forward ahead of new rounds of tariffs.
Although some retail clients are bringing in more goods, he said, “it was delayed, the peak, and certainly not as intense as we had anticipated.”
Household spending increased heading into the fourth quarter but consumers are spending at a less robust pace than last year. U.S. imports of consumer products such as cellphones, toys and apparel plunged in September, with imports of goods from China down 4.9% from August, the Commerce Department said this week.
Content reprinted from THE WALL STREET JOURNAL, By Jennifer Smith Nov. 6, 2019, 3:49 am ET Read more…