Retail Container Ports Quiet But Could See Challenges Ahead

Retail Container Ports Quiet But Could See Challenges Ahead

WASHINGTON, D.C., February 1, 2006 — 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 released today by the National Retail Federation and Global Insight.

“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,” Global Insight Economist Paul Bingham said. “As we must every year, we can expect some shocks to the system. However, their nature and timing is unknown just as the 2005 natural disasters and fuel price spikes couldn’t be predicted. There will also continue to be rail capacity constraints and trucking concerns. 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.”

“Being able to detect the unexpected and respond accordingly is one of the reasons we launched Port Tracker,” NRF Vice President and International Trade Counsel Erik Autor said. “We don’t yet know what we will face in 2006, but Port Tracker is an important tool providing retailers with the most up-to-date information to help keep their supply chains free of disruptions.”

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 percent from November, but still up 4.8 percent 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 percent from a year ago, before climbing to 1.39 million TEU in June, up 10.7 percent from June 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.

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

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 2005 sales of $4.4 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com 

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