Import container volume growth remains strong in light of challenges, says Port Tracker report

Despite the disruptive weather-related events caused by Hurricane Sandy, specifically in the Northeast region of the United States import volume growth continues to grow at a relatively strong pace, according to the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and Hackett Associates.

The report said that October, which is typically the strongest month of the year for volumes, to come in at 1.46 million TEU (Twenty-foot Equivalent Units), which would be up 10.6 percent from October 2011 and ahead of a previous forecast of 9.9 percent annual growth.

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 the recent addition of Fort Lauerdale, Fla.-based Port Everglades.

Port Tracker reported that the first half of 2012 accounted for 7.7 million (Twenty-foot Equivalent Units), which is up 2.9 percent annually and ahead of previous estimates in the 7.3 million TEU range. And for all of 2012 the report is expecting 16.1 million TEU, which would be up 4.5 percent annually.

The 2011 total was 14.8 million TEU, which was up 0.4 percent over 14.75 million TEU in 2010. Volume in 2010 was up 16 percent compared to a dismal 2009. The 12.7 million TEU shipped in 2009 was the lowest annual tally since 2003. According to NRF estimates, retail sales are expected to increase by 3.4 percent to $2.53 trillion.

“Sandy certainly caused major problems that are still being cleaned up, but retailers managed to get their cargo into the country and will have plenty of merchandise on store shelves for the holidays,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “While there was clearly a regional impact, at this point the storm is not expected to have a major effect on holiday sales numbers.”

For September, the most recent month for which data is available, U.S. ports featured in the report handled 1.42 million TEU, which matches August’ output and is up 3.3 percent annually.

Along with October’s estimated 10.7 percent gain, Port Tracker expects November to be up 5.9 percent at 1.37 million TEU and December to be up 9.4 percent at 1.34 million TEU. Looking ahead, it is calling for January and February to be up 8.2 percent and 12 percent, respectively, at 1.39 million TEU and 1.22 million TEU.

The report noted that August, September, and October represent the busiest three-month period of the year, with retailers bringing merchandise in for the holiday season, with combined volume for those months up a cumulative 5.8 percent at 4.3 million TEU. And it also observed that even though cargo volume does not directly correlate with sales, the NRF is calling for 2012 holiday sales to be up 4.1 percent at $586.1 billion.

In the Port Tracker report, Hackett Associates Founder Ben Hackett said that the full extent of the impact from the mayhem and destruction of Hurricane Sandy is still being assessed, but it should hopefully not have too much of a detrimental effect on trade, adding that the New York/New Jersey terminals were impacted for a short period but cargo destined for there was handled elsewhere until service returned and that the rebuilding of infrastructure and homes should cause an uptick for imports of construction materials.

And in an interview with LM, Hackett said that despite the widespread impact of Hurricane Sandy, the fallout on trade could likely have been much worse, although shippers faced higher transportation pricing, due to having to re-route freight to alternate ports than were not forced to close down because of the hurricane.

Given the ongoing economic challenges and recent weather-related disruptions, Hackett explained that on a global basis compared to Europe, the U.S. is doing very well.

“The fundamental U.S. numbers are still looking pretty good, and we expect it to continue in the form of economic growth but not at a 4 percent rate, which is what is really needed to tackle the unemployment rate,” he said. “Nevertheless, there is nothing to indicate we are in a recession.

In regards to the ocean cargo market, Hackett said that carriers have managed to not have a “freight war” as was the case last year and have removed capacity from the system for the Trans-Pacific and Asia-Europe trade lanes, the latter of which he said is down about 15 percent.

On the Trans-Pacific side, he said there have been a fair amount of missed sailings and cancelled services, which represent a fairly significant reduction.

What’s more, Hackett said that ocean freight rates dropped in the third quarter, with recent indications suggesting rates will remain weak on the spot market because of available capacity.