Ports expected to be hassle-free this fall

June 12, 2006
The United States major container ports for consumer goods are operating smoothly, and little of the congestion that has been problematic in past years

The United States’ major container ports for consumer goods are operating smoothly, and little of the congestion that has been problematic in past years is expected this summer or fall, according to analysis from the National Retail Federation (NRF) and Global Insight.

“The ramp-up into peak season is now under way, with monthly container volume building through October,” reports Paul Bingham, an economist with Global Insight. “There is no congestion at the ports now, and the truck and rail systems are operating fluidly. A number of challenges with continued growth in volume remain, and there are concerns with port trucking for later this year, but the backlog of ships without reservations at the Panama Canal has been reduced compared with last month. The bottom line is that we expect the industry to get through the 2006 peak season without serious port congestion.”

“This is a relief compared with the labor shortages and port shutdowns we’ve seen in recent summers,” adds Erik Autor, vice president and international trade counsel with the NRF. “Congestion isn’t in the forecast but that doesn’t mean we stop watching.”

All ports studied in 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 May.

Nationwide, ports surveyed handled 1.32 million twenty-foot equivalent units (TEUs) of container traffic in April, the most recent month for which numbers are available (one TEU is a 20-foot cargo container or its equivalent). The figure was up 6.2% from March and 10% from April 2005. Over the six-month forecast period of the report, volume is expected to climb to a peak of 1.49 million TEU in October, up 8.7% from October 2005. The study 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.

These predictions appear to fly directly in the face of a report from the Transpacific Stabilization Agreement (TSA), which indicates that companies importing goods via ocean carriers from Asia should be prepared to pay increasingly stiff surcharges the closer it gets to peak shipping season this fall. Container shipping lines operating from Asia to the U.S. have expressed concern that even a modest peak season in the summer and fall months will cause disruptions and have major cost impacts on their operations, particularly with regard to East Coast all-water shipments. As a result, member lines in the TSA say they intend to phase in higher peak season surcharges in those market segments as the season progresses. Read more here.