September POLA volumes are mixed

September volumes at the Port of Los Angeles (POLA) were somewhat mixed.

While total volume—at 710,892 TEU (Twenty-foot Equivalent Units)—cracked the 700,000 mark for the third straight month, September was down 4.57 percent annually.

POLA imports, which are primarily comprised of consumer goods, hit 370,785 TEU for a 3.75 percent decrease. Exports were down 12.79 percent to 150,380 TEU. Empty containers rose 1.33 percent to 189,726 TEU.

On a year-to-date basis, POLA volumes are down 5.51 percent at 5,847,167 TEU. As previously reported, POLA continues to feel the effects of volumes being been negatively impacted due to a new service line between ocean carriers MSC and CMA CGM that moved from POLA to neighboring POLB having recently commenced, with both carriers having established hubs at POLB, with vessels calling on POLB. MSC is sharing a POLB hub with COSCO and MSC is in a terminal sharing arrangement with Hanjin at POLB.

September is the second highest volume month for POLA in 2013, with July and August first and third, respectively, at 715, 640 TEU and 709,675 TEU.

With holiday shopping season quickly approaching, these volume levels are consistent on a seasonal basis, but October volumes, which are traditionally the highest of the year, will be telling in terms of how retailers are feeling heading into the holidays from an inventory management perspective.

Earlier this month, the National Retail Federation (NRF) said it expects holiday sales to increase 3.9 percent to $602.1 million compared to the actual 3.5 percent growth in 2012, adding that this tops the 10-year average holiday sales growth of 3.3 percent. Holiday sales—as defined by the NRF—are sales in the months of November and December.

A somewhat modest holiday sales season forecast by the NRF seems to be in line with analysis by Robert W. Baird & Co. analyst Ben Hartford in a research note.

The analyst explained that he expects a modest but more “normal” 2013 Peak Season compared to 2012, which he described as weak, and he explained that this year’s retail sales environment is compressed as there are six fewer selling days between Thanksgiving and Christmas, a time when holiday shopping activity tends to be most active.

Recent data from trade intelligence firm Zepol suggested that holiday sales activity this year could improve over last year, because the holiday import months of July and August were 1.5 percent higher in volume compared with the same two months in 2012. Zepol said this hints at a more active holiday shopping season.

IHS Global Insight managing director, Transportation Advisory Services Chuck Clowdis told LM he agreed with NRF’s forecast but noted his firm’s outlook for holiday retail sales is closer to 3 percent.

“The consumer is feeling a bit better about spending as we enter this Holiday Season,” he said. “While employment is slowly growing pent-up demand is softening to the point I feel a 3 percent increase may even be a bit conservative. There are concerns but this is the sixth Holiday Season of the downturn and even a modest improvement should equate to more confidence and spending.”