Port Tracker report is positive with warmer weather coming

The forecast for growth at United States-based retail container ports is largely positive, according to the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

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 Lauderdale, Fla.-based Port Everglades. Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

With the harshest winter in years in the background, the report painted a picture of optimism for increased import volumes in the coming months.

“With winter over, retailers are stocking up in anticipation of a busy spring and summer,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Consumers can expect plentiful supplies of merchandise. A busy time is expected over the next few months, so retailers are keeping a close eye on the labor situation at West Coast ports to ensure that cargo continues to move smoothly,” Gold said, explaining that the current contract for West Coast dockworkers expires June 30 but negotiations are not expected to begin until mid-May. “Companies are already exploring contingency plans in case of a disruption.” 

Port Tracker is calling for April imports to be up 6.1 percent at 1.38 million TEU (Twenty-foot Equivalent Units). For February, the most recent month for which data is available and the slowest month of the year typically, imports were off 8.4 percent from January at 1.26 million TEU and up 1.4 percent from February 2013. Total 2013 volume for the ports surveyed in the report came in at 16.2 million TEU, which was up 2.3 percent compared to 15.8 million TEU in 2012.

March is expected to be up 15 percent annually at 1.31 million TEU, and April as previously mentioned is expected to be up 6.1 percent at 1.38 million TEU. May and June, at 1.44 million TEU and 1.43 million TEU, are expected to be up 3.8 percent and 5.5 percent, respectively, while July and August, at 1.49 million TEU and 1.51 million TEU, respectively, are expected to be up 3.1 percent and 1.2 percent, with the first half of 2013 expected to be up 5.5 percent at 8.2 million TEU.

In written comments in the report, Hackett Associates Founder Ben Hackett explained that the good economic signs outweigh the bad ones in this report.

For the latter, he said that the cold winter had a negative effect on economic activity at the end of 2013 and into the start of 2014, which dinted job growth, industrial production, and retail sales, which resulted in seeing the inventory-to-sales ratio at levels it had not seen in more than three years. What’s more, were it not for the winter weather, Hackett said that set up would have indicated an economic downturn was coming.

But on the positive side, he cited decent manufacturing growth in the March edition of the Institute for Supply Management’s March Manufacturing Report on Business, which indicated expansion in the sector for the tenth straight month, although the inventory-to-sales ratio headed up to 1.46 in March from 1.45 in February and up from 1.41 in March 2013. He also cited a strong rebound in February U.S. retail sales and jobless benefits filings in February hitting a three-month low.

“Our forecast continues to reflect the economic rebound and we remain convinced that 2014 will have sustainable growth,” wrote Hackett. “For the year as a whole we project an increase of 3.9 percent in containerized imports for the ports we cover, with a total of 19.3 million TEU. Of this, the West Coast represents a 3.7 percent increase over 2013, with 11.6 million TEU and the East Coast a 4.4 percent increase over 2013 with 7 million TEU. The remainder is in the Gulf.”