Port Tracker report is optimistic about future gains despite possible port strike

Even with the specter of a significant labor strike at East and Gulf Coast ports between the International Longshoremen’s Association and the United States Maritime Alliance, the trend lines for holiday import cargo flows appear to be solid, according to the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and Hackett Associates.

The report is calling for September import cargo volume at U.S.-based retail container ports to increase 8.5 percent annually, which is up from a previous estimate of 7.3 percent. And it added that “strong gains” are expected in subsequent months into the holiday season.

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 the new addition of Fort Lauerdale, Fla.-based Port Everglades.
Port Tracker reported that the first half of 2012 accounted for 7.7 million (Twenty-foot Equivalent Units), which is up 3 percent annually and ahead of previous estimates in the 7.3 million TEU range. And for all of 2012 the report is expecting 16 million TEU, which would be up 4.2 percent annually.

The 2011 total was 14.8 million TEU, which was up 0.4 percent over 14.75 million TEU in 2010. Volume in 2010 was up 16 percent compared to a dismal 2009. The 12.7 million TEU shipped in 2009 was the lowest annual tally since 2003. According to NRF estimates, retail sales are expected to increase by 3.4 percent to $2.53 trillion.

“Retailers are bringing in more merchandise for the holiday season this year. The question at some ports is whether longshoremen will be on the docks to unload it,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Regardless of what happens with contract talks, retailers have contingency plans in place to ensure that merchandise reaches store shelves in time and that there is no disruption for shoppers.”

This was echoed by a Northeast-based shipper whom told LM that in anticipation of a possible strike her company has done an inventory review and arranged to bring in inbound inventory ahead of time, coupled with discussing alternate routes with the company’s freight forwarders.

In July, the recent month for which data is available, U.S. ports featured in the report handled 1.41 million TEU, which is up 2.2 percent over June and up 2.5 percent over July 2011.

August is expected to be up 4.4 percent at 1.43 million TEU, and September is projected to see an 8.5 percent gain at 1.49 million TEU. October and November are expected to see 11.7 percent and 1.9 percent gains at 1.48 million TEU and 1.32 million TEU, respectively. November is pegged at 1.32 million TEU for a 1.9 percent increase, and December is expected to rise 2.7 percent to 1.25 million TEU. January is projected to come in at 1.23 million TEU for a 3.8 percent decline.

Hackett Associates Founder Ben Hackett said in the report that the potential port strike has resulted in orders placing earlier orders so goods arrive to the U.S. in time, coupled with many switching deliveries originally headed to the East Coast to the West Coast.

This, he explained, resulted in August being a decent month, and he noted that September should also be above average. If a strike does occur at the end of September, he said that West Coast ports will likely benefit through the end of October should cargo be diverted.

In a recent interview, Hackett explained that any requirements for orders for back-to-school season in August and the beginning of holiday shopping in November will result in increased volumes, adding that new housing starts are also continuing to grow and are still positive.

“We think things are not as bad as perhaps some economists and commentators are making them out to be,” he said.

And while growth is expected through the rest of the year, Hackett said an abundance of ocean capacity still remains. This situation, he said, is likely to put pressure on pricing, which has fluctuated to a fair degree.