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Port News: Volumes remain weak

By Jeff Berman, Senior Editor -- Logistics Management, 4/1/2008

WASHINGTON—As has been the case in previous months, growth at United States-based retail container ports is still mirroring the current faltering economic situation, with weak or negative growth predicted in the coming months, according to the monthly Port Tracker report by the National Retail Federation, a retail trade association, and Global Insight, a provider of economic and financial information.

The ports surveyed in the report—including Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York New Jersey, Hampton Roads, Charleston, and Savannah—handled a cumulative 1.24 million TEU (Twenty-foot Equivalent Units) of container traffic in January, which was the most recent data available. This was down 3.5 percent from December and 4.3 percent from January 2007. January’s performance marks the sixth consecutive month with a year-over-year decline.

With “weak or negative” year-over-year growth predicted to continue, Global Insight Analyst and Port Tracker author Paul Bingham told Logistics Management that his firm is now estimating that the U.S. will be in recession in the first two quarters of 2008, with weak consumer and business spending reflected in weak import volumes through the ports. He added this will have some direct effects on shippers.

“For shippers, this means adequate capacity across the system, even as some providers attempt to reduce the scale of their operations to match the weaker demand,” said Bingham.

Jonathan Gold, NRF vice president for Supply Chain and Customs Policy, said that sentiment is likely to hold true as container traffic mirrors what retailers expect to sell in their stores, with retailers managing inventory to match demand and only modest growth expected for retailers in 2008.

And with Global Insight maintaining that the United States will remain in a recession through at least the second quarter, Bingham opined that it is reasonable to expect it will have an impact on how shippers arrange Peak Season planning heading into the middle and second half of this year.

“The market weakness this year will likely permit shippers to delay their shipments until later in the year, as weak volumes won’t strain capacity as much as in recent years during the peak season,” said Bingham.

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