Ports are quiet now, but is it the calm before another storm?

In the middle of the slow season for container imports, the nation’s major retail container ports are operating without congestion but could face challenges ahead, according to the February Port Tracker report from the National Retail Federation and Global Insight. The report looks at inbound container volume, the availability of trucks and railroad cars to move cargo out of the ports, labor conditions, and other factors that affect cargo movement and congestion.

“Looking ahead to the coming 2006 peak season, we see continued challenges to system performance due to continued growth in trade that will start again within the next two months,” says Paul Bingham, an economist with Global Insight. There will continue to be rail capacity constraints and trucking concerns, he notes, “but with quick decision-making and rapid mitigation steps, we hope the industry will be able to repeat the overall success we saw in 2005 and keep any terminal or network congestion to a minimum.”

All ports covered by the report – Los Angeles/Long Beach, Oakland, Tacoma and Seattle on the West Coast, and New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast – are currently rated “low” for congestion, the same as in the January Port Tracker report. A low rating means “business as usual” with no serious congestion, delays or diversion of cargo anticipated.

The current six-month outlook is for slower growth at West Coast ports than during the same months in 2005. Market share gains that were seen in Oakland, Seattle and Tacoma are not likely to continue at the same pace. The many new high-capacity vessels being added to transpacific services may also affect all-water routes through the Panama and Suez canals.

On the East Coast, growth at the ports of New York/New Jersey, Hampton Roads, Charleston and Savannah has been driven in part by new regional distribution centers built for Asian imports that will not revert to West Coast ports. For railroads serving ports, the few lingering hurricane impacts on the national rail system are being cleared. Despite continued high diesel fuel prices, port trucking is operating smoothly.

Nationwide, ports surveyed handled 1.21 million Twenty-foot Equivalent Units (TEUs) of container traffic during December, the most recent month for which numbers are available. The figure is down 4.1% from November, but still up 4.8% from December 2004, reflecting the seasonal downturn but an increase in year-to-year levels. Over the report’s six-month forecast period, traffic is expected to decline slowly to a low of 1.1 million TEU in February, still up 0.4% from a year ago, before climbing to 1.39 million TEU in June, up 10.7% from June 2005. One TEU is a 20-foot cargo container or its equivalent.

www.nrf.com

www.globalinsight.com

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