Port Tracker report calls for 8.5 percent annual volume gains in February

Citing a tentative labor contract deal recently reached at East Coast and Gulf Coast ports and uncertainty regarding West Coast ports labor negotiations, the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and Hackett Associates is calling for February import cargo volume at major United States-based retail container ports to increase 8.5 percent annually.

According to the report, 1.32 million TEU (Twenty-foot Equivalent Units) were handled in December for the ports followed by Port Tracker, which represented a 2.8 percent gain from November and an 8 percent gain from December 2011. With December’s tally, 2012 had a total of 15.8 million TEU for a 2.9 percent increase over 2011.  

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and Fort Lauerdale, Fla.-based Port Everglades.

The report estimates January volumes at 1.34 million TEU for a 4.6 percent annual gain, with February forecasted at 1.18 million TEU for an 8.5 percent bump. March is expected to increase by 3.6 percent at 1.29 million TEU, and April is expected to head up 4.4 percent at 1.36 million TEU. May and June are pegged at 1.45 million TEU each, respectively, for 4.4 percent and 4.9 percent annual increases.

Port Tracker said that based on these projections, the first half of 2013 should result in about 8.1 million TEU, which would be a 5.3 percent annual improvement.

“We were very happy to see a deal on a tentative contract for the East Coast and Gulf Coast ports but we are urging the parties to quickly work out any outstanding issues and ratify the agreement as soon as possible,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “We need a long-term labor contract in place to give retailers and the other industries that depend on the ports confidence that cargo will continue flowing. We were disappointed that the LA/Long Beach clerical workers’ contract wasn’t ratified, but are encouraging the parties to work through their differences without a disruption.”

As reported in LM, the International Longshoremen’s Association and the U.S. Maritime Alliance reached a tentative agreement on February 1. Had a strike occurred it would have affected 14 East and Gulf Coast ports that cumulatively represent 95 percent of all containerized shipments—and 110 million tons of import and export cargo—to the Eastern seaboard from Maine to Texas. This agreement, noted the report, is subject to reaching supplemental labor agreements and ratification by union members.

And roughly six weeks after teams representing employers at the ports of Los Angeles (POLA) and Long Beach POLB) and the International Longshore and Warehouse Union Local 63 Office Clerical Unit (“OCU”) ended an eight-day strike in the form of a tentative agreement, which saw activity at POLA and POLB essentially come to a halt, the Long Beach Press Telegram reported late last week that clerical workers at both ports rejected a contract proposal that ended the strike in early December.

Ben Hackett, founder of Hackett Associates, said in the report that short-to-medium term economic indicators suggest that growth will be sustained but it will not be significant as consumers remain cautious—or in a holding pattern. He added that the GDP decrease in the fourth quarter should not be used as a barometer for trade projections, whereas the Department of Commerce data showing that net disposable income was up is more relevant.

In a recent interview with LM, Hackett said that U.S.-bound import growth is expected in 2013 but at a slower pace than in 2012.

“Uncertainty is the main reason for this,” he said. “First, there was the Fiscal Cliff concern, which has since been resolved somewhat. But tax increases will take disposable income out of the system. The next level of uncertainty is the debt ceiling, which will likely cause consumers to save more money. Things are not the same as they have been over the last 20-to-30 years. Growth is slowing down due to things like globalization coming more into balance and consumers being more hesitant and qualified in terms of what they are buying, which is influencing purchasing patterns. The boom days seem to be over.”

Hackett added that there currently is too much ocean carrier capacity relative to demand, with carriers still not removing as much capacity as is needed to get the market back to an acceptable equilibrium. Instead, carriers remain focused on holding on to market share, he said.