Logistics News: Port Tracker report says monthly volumes hit lowest level in seven years
Jeff Berman, Group News Editor -- Logistics Management, 5/1/2009
WASHINGTON — While there are some indications that the economy is heading in the right direction, recent data from the monthly Port Tracker report by IHS Global Insight and the National Retail Federation (NRF) indicates that there is clearly a long way to go before the economy fully rebounds.
The recent report states that import cargo volume at the nation’s major retail container ports sank to its lowest level in seven years in February, with the number of containers going below the one million mark for the first time in five years. And they are not likely to hit one million before May, even though activity will pick up in March and April with imports likely to see major year-over-year declines through the summer at a minimum. February was the 20th consecutive month in which volumes were down year-over-year.
Port trade forecasts in the report cover all containerized trade, not just retail goods, according to IHS Global Insight and the NRF. The ports selected for coverage are those considered most important to retailers, but, for reasons of monitoring the potential for overall congestion in the system, the organizations look at all containerized imports, including business-to-business shipments of items like components used in manufacturing or other wholesale goods.
IHS Global Insight analyst and Port Tracker author Paul Bingham told Logistics Management that it’s unlikely these low volumes will abate anytime in the near future.
“The biggest takeaways [of this report] are that with the extreme drop in cargo volumes, even with reductions in capacity by carriers, there is more than adequate system capability to handle shippers’ cargo,” he said. “Transportation rates are under pressure as carriers struggle over shares of the shrunken market. Moreover, demand is not going to rebound much during the next six months, meaning the pricing pressures and capacity adequacy will continue.”
Bingham added that he projects that the first quarter of this year will turn out to be the bottom of the recession. He explained that since February historically has the weakest traffic—and is the shortest month—it is fair to assume that we have hit the bottom for monthly volume.
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