Retail Container Traffic Drops Below Last Year, Expected to See Gains as Holidays Approach

Import cargo volume at the nation's major retail container ports will remain below last year's levels for the remainder of the summer before seeing year-over-year gains again this fall as retailers begin to stock up for the holiday season

Year-over-year increases in retail container shipping are expected to resume in September. (Photo by Evan Lockridge)
Import cargo volume at the nation's major retail container ports will remain below last year's levels for the remainder of the summer before seeing year-over-year gains again this fall as retailers begin to stock up for the holiday season.
The prediction comes from the Global Port Tracker report released by the National Retail Federation and Hackett Associates.
"Cargo numbers have been down this summer, but that's a reflection of last year's unusual shipping patterns more than the economy," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. "The economy continues to face challenges, but job growth has been steady and retailers have been adding jobs themselves as sales improve."
Cargo figures for this fall clearly show that retailers are expecting a healthy holiday season, Gold said.
U.S. ports followed by Global Port Tracker handled 1.25 million Twenty-foot Equivalent Units in June, the latest month for which numbers are available. That was down 2.6% from May and 5% from June 2010. One TEU is one 20-foot cargo container or its equivalent.
June's volume broke an 18-month streak of year-over-year improvement dating to December 2009, and declines continued in July, which was estimated at 1.3 million TEU, down 5.7% from July 2010. August is forecast at 1.4 million TEU, a 1.6% decrease from a year ago.
Rather than indicating an economic downturn, however, the numbers are a skewed comparison against higher-than-normal numbers last summer, when fears of shortages in shipping capacity caused many retailers to bring holiday merchandise into the country earlier than usual. Actual retail sales have seen 12 straight months of growth.
Year-over-year increases are expected to resume in September, which is forecast at 1.48 million TEU, up 10.4% from last year.
The first half of 2011 totaled 7.15 million TEU, up 3.9% from the first half of 2010, and the full year is forecast at 15.28 million TEU, up 3.6% from 2010. Imports during 2010 totaled 14.7 million TEU, a 16% increase over unusually low numbers in 2009.
While cargo volume is expected to increase through this fall's holiday shipping cycle, Hackett Associates founder Ben Hackett said a number of key economic indicators are raising concerns about future cargo growth.
"Industrial production in China is weak, bulk commodity imports are declining, and ports are beginning to report reduced export volumes," Hackett said. "In the U.S., we have lower private consumption, lower government expenditure and lower indices like the purchasing managers' index. This is cause for concern because it could lead to lower growth of trade volumes."
IANA's 2Q numbers
Meanwhile, the Intermodal Association of North America reported that domestic and international intermodal volumes posted solid gains in the second quarter.
IANA's Intermodal Market Trends & Statistics report notes that domestic container volume grew 9% year-over-year, a stronger pace than during the previous two individual quarters. This rate of increase is especially impressive considering that the highest gain recorded, 16.4%, was posted in Q2 2010.
Although domestic containers recorded significant increases, trailer volumes had more modest gains, rising 4.6% over 2010 levels, a slightly slower pace than in the previous quarters that likely represents a continued equipment shift toward domestic containers. Domestic intermodal's strong pace was bolstered by a steep rise in diesel prices that likely made it more cost-effective for shippers to shift freight off the highway.
International intermodal volumes during the quarter increased 5.4% year-over-year. While this is the slowest rate of international growth since late 2009, it should be noted that previous quarters benefited from weak comparisons, says IANA. International shipments also would likely have been higher were it not for the disasters in Japan that reduced the volume of Japanese imports.
While the rate of intermodal growth slowed from the first quarter to the second quarter, IANA says it still remains in-line with many industry analyst estimates of 6-8% year-over-year expansion.
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