Port Tracker report lowers 2013 forecast but says growth is still in the cards

Even with the government shutdown and a downwardly revised annual forecast, activity at United States-based retail container ports continued on a growth path and expected to continue that way through the end of the year, 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.

October, which is commonly viewed as the busiest month of the year, was estimated to come in at 1.43 million TEU (Twenty-foot Equivalent Units), which would be flat compared to September and up 6.5 percent annually. Even though it is calling for annual growth, this forecast is down compared to the 9.1 percent growth rate that the report called for a month ago. And the report said it expects 2013 holiday sales to grow 3.9 percent annually at $602.1 million, with the projected 4.35 million cargo containers handled from August through September, when the majority of holiday merchandise is imported into the U.S., is expected to be up 4.3 percent annually and also represent 26.8 percent of all U.S.-based retail imports for the year.

“Retailers place their orders for merchandise months ahead of time, so cargo arriving at the ports in October and for most of the rest of the year was ordered long before anybody ever heard of a shutdown,” Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “The question at this point isn’t how much merchandise arrived but how much consumers bought, and how they are going to react as economic talks continue in Washington. Lawmakers need to take steps that build confidence, not continue the uncertainty.”

The 2013 forecast is now at 16.2 million TEU, which is down from 16.3 million TEU last month. This represents a 2.3 percent increase over 2012’s 15.8 million TEU, with the first half of 2013 at 7.8 million TEU up 1.2 percent compared to the first half of 2012.

Hackett Associates Founder Ben Hackett said that this mild annual increase reduction is due in part to the federal government shutdown in October and a fairly high inventory-to-sales ratio. He added that U.S. GDP forecasts are not expected to be hindered by the shutdown, with growth in the first half of 2014 expected to be decent.

“Peak Season this year was less than it could have been, due to high inventory levels,” Hackett told LM. “And by October the volumes are somewhat down as most of the imports for holiday merchandise have already come through so there is a bit of a slowing down at the moment.”

As for the high inventory-to-sales ratio, Hackett explained it is a byproduct of retailers buying merchandise early, coupled with some consumer hesitancy.

Along with October expected to be up 6.5 percent annually at 1.43 million TEU, Port Tracker is calling for November to be up 3.3 percent at 1.33 million TEU and December to be up 1.8 percent at 1.31 million TEU. January, February, and March are pegged at 1.35 million TEU, 1.18 million TEU, and 1.33 million TEU, respectively, for a gain of 3 percent, a decrease of 7.5 percent, and an increase of 17 percent.