Retail Container Ports Operating Without Congestion

Retail Container Ports Operating Without Congestion

Washington, DC, January 9, 2006 — The nation’s major retail container ports are operating without congestion now that the annual shipping cycle has shifted into the slow season, according to the January Port Tracker report released today by the National Retail Federation and Global Insight.

“This is the time of year when we expect the ports to be comparatively quiet and they are,” NRF Vice President and International Trade Counsel Erik Autor said. “Port Tracker will continue monitoring the ports as activity picks up through the spring and summer and will continue to aid retailers in managing their supply chains.”

“Following a record-setting peak season in 2005, the ports are in good condition without congestion,” Global Insight Economist Paul Bingham said. “The successful peak season was due to the combined efforts of everyone in the transportation industry as well as the shippers. Despite natural disasters, increased fuel prices and continued rail capacity restraints, there was no repeat of the congestion we saw in 2004. The closest we came was with strained rail networks after Hurricane Katrina, but steps were quickly taken to minimize the impact and keep the situation from spreading.”

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 December Port Tracker report. A low rating means “business as usual” with no serious congestion, delays or diversion of cargo anticipated.

Both East and West Coast ports are currently in the slow season, with volumes expected to remain low until seasonal volume increases are seen in the spring. On the West Coast, Los Angeles and Long Beach set records for the year, but lost market share to Oakland and Puget Sound. Congestion levels were generally low despite a significant increase in traffic over 2004, when congestion was extensive. Despite hurricanes and high fuel prices, railroads did well in 2005 and are expected to continue to do so as long as capacity issues can be resolved. On the trucking front, highway safety groups and trucking industry lobbyists are continuing to bicker with the Federal Motor Safety Administration over regulatory issues. While diesel fuel prices are currently down, energy forecasters are predicting that low inventories and upward price pressures could create tension in the market during the first half of the year.

Nationwide, ports surveyed handled 1.26 million Twenty-foot Equivalent Units (TEUs) of container traffic during November, the most recent month for which data is available. The figure is down 7.8 percent from October, but still up 3.8 percent from November 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 1.13 million TEU in February, still up 2.1 percent from a year ago, before climbing to 1.34 million TEU in May, up 9.4 percent from May 2005. One TEU is a 20-foot cargo container or its equivalent.

Port Tracker, which is produced by the economic research, forecasting and analysis firm Global Insight for NRF, 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. The complete report is available to NRF retail members for $1,000 per year. Subscription rates are $2,000 a year for NRF associate members and $5,000 for non-members. Information is available at www.nrf.com/porttracker or by calling (202) 783-7971.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees - about one in five American workers - and 2004 sales of $4.1 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com

Global Insight Inc. is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political and operational factors. The company has over 3,800 clients in industry, finance and government with revenues in excess of $80 million, over 600 employees and 23 offices in 13 countries covering North and South America, Europe, Africa, the Middle East and Asia. www.globalinsight.com

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