Ocean shipping: Port Tracker report notes August is new peak month for 2010

As the year goes on, import cargo volumes at U.S.-based retail container ports are expected to decline on a sequential basis but remain up on an annual basis, according to the most recent Port Tracker report by the National Retail Federation (NRF) and Hackett Associates.

As LM has reported, what is happening with these volumes is different from a typical year in which October is typically the peak month for import cargo volumes as shippers move cargo into the U.S. via ocean carriers in advance of the holiday rush.

But what is happening now, according to the report, is that the peak month for volumes is being bumped up to earlier in the year.

In August, the most recent month for which data is available, U.S. ports handled 1.42 million Twenty-foot Equivalent Units (TEU), which was 3 percent better than July’s 1.38 million TEU and up 23 percent year-over-year. The report also noted that August marked the ninth straight month to show an annual gain after a 28-month stretch of declines that ended in December 2009.

This year began with sequential gains in December and January, followed by a decline in February. March volumes—came in at 1.07 million TEU (Twenty-foot Equivalent Units), which was up 7 percent from February’s 1.01 million TEU and 12 percent year-over-year. April volumes at 1.15 million TEU—were up 7 percent from March and 16 percent year-over-year. And May hit 1.25 million TEU followed by June’s 1.32 million TEU and July’s 1.38 million TEU.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, and Savannah.
“Peak season came earlier than expected this year,” said Ben Hackett, president of Hackett Associates, in an interview. “August volumes were basically in line with July and what we saw as well was that there was a little of a shift to the West Coast from East Coast, which was not a big surprise. But we are seeing retail sales picking up somewhat, with retailers currently having [sufficient] inventory for sales….and are trying to empty out the inventory they brought in earlier in the year.”

The Port Tracker report noted that the shift in the peak month from October to August is due to a backlog in cargo from earlier in 2010 when ocean carriers took their time to replace vessels taken out of service during the recession, coupled with retailers bringing merchandise into the U.S. ahead of time to avoid the potential of delays in the fall.

Not having enough containers was a real issue earlier in the year but has since abated, with carriers bringing back empty containers from Europe and North America.

While August was estimated at 1.42 million TEU, September is projected to reach 1.37 million TEU for a 20 percent annual increase, and October is pegged at 1.32 million TEU for a 11 percent gain over 2009. December is expected to hit 1.12 million TEU for a 3 percent increase, and January at 1.09 million TEU would be an 8 percent gain.

According to the Port Tracker report, the first half of 2010 came in at 6.9 million TEU for a 17 percent year-over-year increase, with the full year forecasted to hit 14.7 million TEU, representing what would be a 16 percent gain from 2009’s 12.7 million TEU, the lowest annual total since 2003’s 12.5 million TEU. The report added that if 2010 hits 14.7 million TEU, it would still fall below the 15.2 million TEU and 16.5 million TEU levels from 2008 and 2007.

Hackett said that fourth quarter volumes will be weak but measured against 2009 it will still look relatively strong. And 2010 growth as a whole for all U.S. ports was described by Hackett as very robust, but it is not expected to happen in 2011 due to the fact that 2010 annual comparisons were up against a dismal 2009. By the end of 2010, Hackett said volumes will be close to 2008 levels.

“Cargo is still coming through but retailers are mostly stocked up for the holiday season,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Retailers aren’t going to say the recession is behind them until their customers tell them it is, but we are hoping to see some sustainable economic growth over the next several weeks. The goal is that inventory levels will match sales as closely as possible.”