Port Tracker report points to expected volume gains in September and October

Import cargo volumes at major United States-based container ports are slowly beginning to see annual monthly gains as retailers prepare for the holiday shopping season, according to the monthly Port Tracker report by the National Retail Federation (NRF) and Hackett Associates.

Port Tracker stated that total volume for 2011 is expected to hit 15.4 million TEU (Twenty-foot equivalent units), which would represent a 4.3 percent gain over 2010. In 2010, imports hit 14.7 million TEU, which was up 16 percent compared to a dismal 2009. The 12.7 million TEU shipped in 2009 was the lowest annual tally since 2003. 

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, and Savannah.

The most recent month for which data is available in the report is July at 1.32 million TEU, which was 6 percent better than June and 4 percent below July 2010. June was down 5 percent annually at 1.25 million TEU, snapping a streak of 18th straight months of annual gains after a 28-month stretch of declines that ended in December 2009. While June and July are both down compared to 2010, the report said August is estimated at 1.42 million TEU, which would be flat compared to August 2010.

“With the most crucial spending period of the year just weeks away, retailers have made careful decisions on the amount of merchandise they need to properly stock their stores during the holidays,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “This year, retailers have the luxury of importing holiday goods later than last year, which better ensures their inventory levels will accurately meet consumer demand.”

With signs of some type of Peak Season shaping up, the projections for monthly growth are somewhat modest albeit encouraging.

Ben Hackett, president of Hackett Associates, told LM in a recent interview he is keeping a close eye on the inventory-to-sales ratio, which measures the percentage of inventories a company has on hand to support the current amount of sales, when gauging current and projected volume growth.

“The ratio right now is pretty low, which means that one of the reasons shipment volume is somewhat down is that retailers and wholesalers are running on low levels of stock,” he said. “What that means is any uptick in consumer demand will be affected in an increase of flows and imports because there is not enough stock available to meet that. As a result, we will see the normal seasonal pickup coming at a more normal or traditional time, rather than coming early like it did last year.”

The Port Tracker report is calling for September to come in at 1.5 million TEU for an 11.8 percent annual increase. October is expected to reach 1.48 million TEU for a 9.5 percent increase. November is projected to hit 1.33 million TEU for an 8 percent increase. December is expected to hit 1.2 million TEU for a 4.5 percent increase, and January is pegged at 1.19 million TEU for a 1 percent decrease.

When asked about this year’s Peak Season prospects, Hackett said it is already taking form in the U.S. in the form of slightly improved freight rates and carriers implementing Peak Season surcharges.

And with the amount of inventory that was being held, Hackett said a Peak Season of some sort is in effect although it will not be as strong as other ones due to a lack of strong demand.

“No matter what happens, Peak Season in the U.S. is likely to be over by the end of September or early October,” said Hackett. “It will come later in Europe, because the sales occur later, with the Peak Season starting later in September and October and ending around the first week of November.”