Port Tracker report points to late summer slowdown

As per the usual in recent years, there are lots of variables when gauging future economic growth prospects. Those variables were front and center in this month’s edition of the Port Tracker report from the National Retail Federation (NRF) and Hackett Associates.

The report noted that import growth at major U.S.-based retail container ports is expected to increase 3.3 percent annually in May, but cautioned that growth could slow down considerably by the end of the summer. 

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 recent addition of Fort Lauerdale, Fla.-based Port Everglades.

“The weak cargo increases expected over the next few months are consistent with other signs that the economy is slowly improving but show that retailers remain cautious, especially when it comes to stocking their inventories,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “We’re looking at barely 1 percent of year-over-year growth through the early summer, and August and September are expected to be basically flat even though they’re supposed to be two of the busiest months of the years. With consumer confidence low, employment struggling to recover, and less money in shoppers’ pockets because of the payroll tax hike, we need to see action from Washington that will provide some fiscal certainty for families and businesses alike.”

The Port Tracker report said 1.14 million TEU (Twenty-foot Equivalent Units) were handled in March for the ports followed by Port Tracker, a 10.9 percent decline from February and an 8.6 percent decrease compared to March 2012. This is the most recent month for which data is available.

The report is calling for the first six months of 2013 to reach 7.8 million TEU, which would be a 2 percent annual improvement. For all of 2012, the total TEU count was 15.8 million TEU, marking a 2.9 percent annual bump. 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.

Port Tracker estimates April volumes to be at 1.29 million TEU for a 1.4 percent annual decrease. It is calling for May to be up 3.3 percent at 1.42 million TEU, and June to be up 1.4 percent at 1.4 million.

Hackett Associates Founder Ben Hackett said in the report that despite the Federal government pumping liquidity into the market, consumer confidence still has not fully turned the corner despite significant growth from its recent low points in 2009 and 2011.

“The uncertainty seems to be completely ignored by investors on Wall Street as the Dow climbs to new and dizzy heights,” he wrote. “There seems to be less discussion about austerity measures as doubt has been cast on the validity of the fundamental economic analysis to support cost cutting whilst at the same time trying to encourage growth. As we can see in Europe, it does not appear that the two concepts go hand in hand. We need to see the economy strengthen in the coming quarters before we can begin to see the threat of a further economic downturn dissipating. Trade will remain at low growth levels until we reach this stage. One thing is clear: the impact of globalization and the shifting of production to the East has come to an end and carriers cannot count on growing volumes in a world of low consumer spending. The benefit to importers will be a longer period of low freight rates as supply continues to outpace demand.”