Ocean shipping: POLA/POLB see solid September 2010 volumes

Volumes at the Port of Los Angeles (POLA) and Port of Long Beach (POLB) were strong year-over-year numbers in September but down somewhat on a sequential basis. 

POLB imports, which are primarily comprised of consumer goods, came in at 288,905 TEU (Twenty-foot Equivalent Units) in September for a 28.4 percent year-over-year increase but were down compared to the 311,240 coming into the port in August. And exports, which are primarily comprised of raw materials, were up 13.4 percent to 124,021 TEU, down slightly from September’s 126,039 TEU.

Total POLB shipments—including 161,864 empty TEU for a 52.6 percent gain—at 574,790 TEU—were up 30.9 percent compared to a year ago.

POLA imports—at 373,249—were up 20.76 from last year and down from August’s 399, 150, and exports—at 139,800—were basically flat at -0.34 percent and down from August’s 147,608. Total POLA shipments for August—including 198,563 empty TEU for a 47.8 percent annual gain—at 711,613—were up 21.94 percent annually but down compared to August’s 763,837 TEU.

September marked the first time in four months that total POLA volume was below 730,000 TEU. And like August, empty container exports were higher than loaded container exports in September, due in large part to the surge of imports driven by a high demand for empty equipment, although anecdotal evidence indicates this trend may be ebbing.

“Overall, it has been a pretty strong 2010 and better than what we had originally forecasted but not completely unexpected, given the declines we saw in 2009,” said POLA Director of Communications Phillip Sanfield in an interview. “We finished up with a strong third quarter and for the fourth quarter and into 2011 we are seeing a recalibration effect, where we have regained the cargo from where consumer spending was really off in 2009. By 2011, we will think consumer demand and trade will be more closely aligned after this adjustment period this year which caught us up with the previous year.”

Sanfield said he expects growth at POLA through the remainder of the year although it may not be at the levels seen in recent months. But the 2011 growth rate may come down and be more in line with the overall economic growth rate but higher than GDP growth. Instead, he said 2011 may be more of a recalibration between retailers and inventory stock but not at current growth rate levels.

The majority of containerized imports coming into the POLA over the past six-to-12 months have been furniture, clothing, footwear, toys, and automobile parts, according to Sanfield. Exports, he said, appear to have flattened out as overseas factories have needed fewer supplies. And the holiday shipping season is winding down, as evidenced by September having the lowest monthly export total of the year to date, which is partially due to the current value of the American dollar, which is declining.

Earlier this year, the Port Tracker report from the National Retail Federation and Hackett Associates said that July would be the big month for import cargo volumes. But now it appears that August may end up being the peak month. If this holds true, it would be the first time August was the peak month at POLA since 2008, when it handled roughly 757,000 TEU.

As LM has reported, what is happening with these volumes is different from a typical year in which October is typically the peak month for import cargo volumes as shippers move cargo into the U.S. via ocean carriers in advance of the holiday rush.

But what is happening now, according to the report, is that the peak month for volumes is being bumped up to earlier in the year.

“Peak season came earlier than expected this year,” said Ben Hackett, president of Hackett Associates, in an interview. “August volumes were basically in line with July and what we saw as well was that there was a little of a shift to the West Coast from East Coast, which was not a big surprise. But we are seeing retail sales picking up somewhat, with retailers currently having [sufficient] inventory for sales….and are trying to empty out the inventory they brought in earlier in the year.”

The Port Tracker report noted that the shift in the peak month from October to August is due to a backlog in cargo from earlier in 2010 when ocean carriers took their time to replace vessels taken out of service during the recession, coupled with retailers bringing merchandise into the U.S. ahead of time to avoid the potential of delays in the fall.