Solid import numbers at West Coast ports could pave way for a decent Peak Season

While August volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) were mixed, they could serve as a precursor to a solid holiday shopping season.

Total volumes for POLA—at 709,675 Twenty-Foot Equivalent Units (TEU)—were up 0.43 percent compared to August 2012, marking the second straight month total volume has cracked the 700,000 TEU mark.

POLA imports, which are primarily comprised of consumer goods, came in at 355,682 TEU for a 1.41 percent decrease. Exports were down 3.84 percent to 158,484 TEU. Empty containers dropped .86 percent to 195,508 TEU.

On a year-to-date basis, POLA volumes are down 5.64 percent at 5,136,275.35. 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.

But even with those changes, August represents the second best month of the year for the port, with only July faring better at 715,640.25 TEU.

POLB total volumes—at 630,292 TEU—were up 16 percent annually. This output, according to port officials, stands as not only the best month for 2013 but also its best month since October 2007, which signals a potentially strong beginning to Peak Season at a time when its prospects have been mixed or somewhat hard to gauge due to largely sluggish consumer spending.

August import for POLB—at 327,817 TEU—were up 19.7 percent compared to August 2012, while exports saw a 20.2 percent jump to 154,118 TEU.  Empties saw a 5.8 percent gain at 148,357 TEU.

Through the first eight months of the year, POLB volume is up 13.6 annually, with imports, exports, and empties up 13.6 percent, 10.9 percent, and 11 percent, respectively.

“Container import trends sustained positive momentum during August following a stronger than expected July reading, reflecting easy comparisons with the prior year and more normal seasonal activity in recent months, in our view,” wrote Todd Fowler, KeyBanc Capital Markets analyst, in a research note. “While we maintain a relatively neutral peak season outlook based on channel commentary and general economic conditions, recent container import trends are encouraging and could signal modestly stronger peak activity relative to last year.”

With August cargo numbers from these two large West Coast ports largely promising, data from trade intelligence firm Zepol observed that August U.S. imports—at 1.61 million TEU—are the second highest for all of 2013, with July the highest at 1.69 million TEU, and 0.5 percent of August 2012.

“The holiday import months of July and August were 1.5 percent higher in volume compared with the same two months in 2012,” said Zepol’s CEO Paul Rasmusse in a statement. “This is one of the only significant differences in TEU volume from 2012 to 2013, which hints at a more active holiday shopping season.”

As previously reported, there are indications holiday–related import activity is gaining traction, according to the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

The report is calling for September volumes at United States-based retail container ports to increase 5.1 percent annually in September, with retailers preparing for the holiday season. Last month, it noted import gains are expected through the holiday season. 

Hackett Associates Founder Ben Hackett said in the report that the U.S. economy is on the road to sustained growth, with second quarter GDP of 2.5 percent beating expectations, coupled with an improving unemployment outlook, with consumer spending expected to increase in the fourth quarter.

“A good amount of that growth is likely to come from back-to-school and the holiday season, but we are keeping our eye on housing starts as well, which we expect to continue to pick up as the year goes on,” said Hackett in a recent interview.