Port Tracker report calls for flat summer growth followed by upturn in the fall

In what has become a modest trend, import cargo volumes at major United States-based container ports are expected to remain at the same levels they were at a year ago this summer, with subsequent increases in the fall, according to the monthly Port Tracker report by the National Retail Federation (NRF) and Hackett Associates.

The report said the first half of 2011 is estimated at 1.31 million TEU (Twenty-foot equivalent units) for a 7.2 percent increase over June 2010, which is down less than 1 percent from May’s estimate. Port Tracker previously called for 6.2 percent annual growth for all of 2011, and the report said this estimate remains “realistic.”

In 2010, the report said, there was a total of 14.7 million TEU moved—a 16 percent gain over 2009, which was largely achieved due to 2009’s 12.7 million TEU serving as the lowest annual tally since 2003.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, and Savannah. The most recent month for which data is available in the report is May, coming in at 1.28 million Twenty-foot Equivalent Units (TEU) and the 18th straight month to show an annual gain after a 28-month stretch of declines that ended in December 2009. May’s tally was up 6 percent over April’s 1.22 million TEU and up 1 percent over May 2010.

Ben Hackett, president of Hackett Associates, told LM he is keeping a close eye on the inventory-to-sales ratio, which measures the percentage of inventories a company has on hand to support the current amount of sales, when gauging current and projected volume growth.

“The ratio right now is pretty low, which means that one of the reasons shipment volume is somewhat down is that retailers and wholesalers are running on low levels of stock,” he said. “What that means is any uptick in consumer demand will be affected in an increase of flows and imports because there is not enough stock available to meet that. As a result, we will see the normal seasonal pickup coming at a more normal or traditional time, rather than coming early like it did last year.”

Hackett added that east coast ports appear to be faring better overall that west coast ports to date in 2011.

The current low level of inventories is being done by design to a large degree, due to a lack of consistent or steady demand although things are not as bad as one with assume, given the report’s current 2011 growth forecast of 6.2 percent, said Hackett. He added that the report’s authors are happy with the most recent batch of numbers, as 6-to-7 percent growth in consumer goods is not bad.

The Port Tracker report is calling for June to come in at 1.31 million TEU for a 0.08 percent annual decrease. July is expected to reach 1.36 million TEU for a 1.3 percent decrease. August is projected to hit 1.43 million TEU for a 0.6 percent increase. September is expected to hit 1.47 million TEU for a 10 percent increase, and October is pegged at 1.53 million TEU for an 18 percent gain. November is expected to be up 19 percent at 1.41 million TEU.

“With the economy facing continuing challenges, retailers are managing their inventory levels carefully,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “But the increases in import volume expected this fall are a clear sign that retailers are confident consumer demand will be there in the fourth quarter.”