Ports were up to the challenge for 2005 peak season

The nation’s major retail container ports are operating without significant congestion problems as the industry’s peak shipping season comes to an end, according to the National Retail Federation (NRF) trade association and trade analysis firm Global Insight.

“After the past few years, it’s a relief to know we’ve gotten through the peak of the shipping season without any serious incidents,” says Erik Autor, vice president and international trade counsel with the NRF. “There were certainly some threats from Hurricane Katrina and the storm’s effect on railroad capacity, but the ports themselves didn’t see the problems we’ve seen in the past. All in all, it’s been a good year.”

“The ports are in good condition,” reports Paul Bingham, economist with Global Insight. “The railroads have gotten through with few substantial delays and little congestion despite strained network and terminal capacity. Some shippers experienced intermodal rail delays, but the industry performed much better than last year at this time. There are still some lingering impacts of rail disruption due to the hurricanes, but with less volume coming into the ports the next few months we have lowered our congestion ratings for West Coast ports back to low and the Atlantic ports we cover are still rated low.”

All of the West Coast ports studied by NRF/Global Insight – Los Angeles/Long Beach, Oakland, Tacoma and Seattle – were given a “medium” congestion rating in November to reflect railroad delays related to Hurricane Katrina even though the ports themselves were operating smoothly. All are now rated “low,” however, and all East Coast ports studied – New York/New Jersey, Hampton Roads, Charleston and Savannah – remain at “low,” the same rating as in November. A low ranking means “business as usual” with no serious congestion, delays or diversion of cargo anticipated.

With the peak season winding down, ports on both coasts are headed into the slow season. Container volume will be down from recent months, but still above last year’s levels. Growth will continue, but at increasingly slower rates. On the rails, intermodal traffic is continuing to set records, with the third quarter’s 5.6% increase over 2004 marking the 14th consecutive quarter of increased traffic. Diesel prices are falling, and the availability of drivers and turnaround time at ports have returned as trucking companies’ top concerns. Port labor availability has been adequate all year even at record peak volume levels.

Nationwide, ports surveyed handled 1.37 million twenty-foot equivalent units (TEUs) of container traffic during October, the most recent month for which data is available. The figure is up 7.9% from the same month in 2004 and 1.9% from September 2005. Looking forward six months, traffic is expected to slowly decline to a low of 1.13 million TEUs in February 2006, still up 1.3% from a year ago, before starting to climb again and hitting 1.3 million TEUs in April 2006, up 8.3% from April 2005. One TEU is a 20-foot cargo container or its equivalent.

www.nrf.com

www.globalinsight.com

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