Ocean shipping/Global Logstics: Port Tracker report calls for positive growth in early 2010

WASHINGTON-Even though import cargo volumes at major U.S. container ports has been down year-over-year for 27 consecutive months through September, there is a chance these volumes may shift towards year-over-year increases in early 2010, according to the monthly Port Tracker report from IHS Global Insight and the National Retail Federation.

While a change in direction regarding the volumes is possible, NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement that while there is not yet enough data to establish a clear trend, he is hopeful a recovery is coming.

According to Port Tracker data, U.S. ports included in this report handled 1.14 Twenty-foot equivalent units (TEU) in September, which fell short of August's 1.17 million TEU. Despite the sequential decline, September was the fifth straight month to surpass the one million container mark. September was down 16 percent year-over-year.

Port trade forecasts in the report cover all containerized trade, not just retail goods, according to IHS Global Insight and the NRF. The ports selected for coverage are those considered most important to retailers, but, for reasons of monitoring the potential for overall congestion in the system, the organizations look at containerized imports, including business-to-business shipments of items like components used in manufacturing or other wholesale goods.

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

As has been the case with other freight transportation modes, the healthier year-over-year volume comparisons being projected may have more to do with the economy tumbling this time a year rather than true economic growth and recovery.

IHS Global Insight Economist Paul Bingham told LM that fundamentally the retail volume turning positive is a sign of the recovery, albeit a weak one.

"Year-over-year comparisons get easier from now on for 2010 vs. 2009 as opposed to most of this year versus 2008, especially during the period before the 2008 financial crisis and subsequent sharp drop off in trade volumes that followed," said Bingham. "For shippers, the takeaways are that volumes are still weak, and though the upswing continues, the seasonal pattern continues with monthly volume declines in winter post-peak season."

While holiday shopping has the potential to portend an uptick in consumer spending, Bingham said this is an example of the month-to-month seasonal trend at work, with spring uptick following the trough in slow season in February happening every year.

"There is no sign of strong holiday consumer spending, and retailers have tried to be careful to try to balance still-weak sales against the desire to not suffer stock outs of those items that are selling this season," said Bingham. "Inventories are still lean. Retail port volume growth will likely remain soft as retailers will wait until next year to take inventories to high levels as the pent up consumer demand starts to show up in store sales."

Read the rest of the logisticsmgmt.com article here.