During peak-season 2011, U.S. ports handled about 800,000 20-foot container units less than the macro economy indicated they should have moved. Those missing containers may materialize this fall, however.
Transportation industry professionals who spoke Wednesday at the annual Pulse of the Port seminar sponsored by the Port of Long Beach agreed that peak-season 2012 will certainly be better than last year, and they indicated this could actually be a relatively strong year for containerized imports.
Based on retail sales last year, U.S. ports should have handled about 1.6 million TEUs per month during the four-month peak season, said Walter Kemmsies, chief economist at Moffatt & Nichol engineers. The actual volume turned out to be 1.4 million TEUs per month, or a shortfall of 800,000 TEUs for the peak season.
Extrapolated out over the entire year, imports in 2011 should have increased 7 percent over 2010, when in reality they were almost flat, Kemmsies added.
Economists know now that retailers managed their inventories very tightly last year. Maybe they were too careful and missed sales opportunities.
This year, carriers and third-party logistics providers say their customers are generally optimistic about overall economic growth as well as retail sales, so they expect peak-season 2012 will return to the traditional pattern of strong imports from July through October.
Expeditors International polled its customers recently, and the majority of them expect to return to a traditional peak this year, said Daniel Wall, senior vice president of ocean cargo management services. Some 55 percent expect to increase their imports because of stronger sales or the release of new products.
Wall said 95 percent of the respondents said they will ship at least as much volume, if not more, through West Coast ports this year for several reasons, including apprehension about contract negotiations between East and Gulf Coast employers and the International Longshoremen’s Association. The ILA contract expires on Sept. 30, at the height of the peak season.
Orient Overseas Container Line projects cargo volume in the eastbound Pacific will increase 4.3 percent this year. Erxin Yao, president of OOCL (USA), said capacity in the trade will increase about 7.2 percent. He noted that is nominal, or listed capacity. Since ships rarely achieve their listed capacity, supply and demand will be closer than the numbers suggest, Yao said.
Consumer spending in the U.S. accounts for 14 to 15 percent of global gross domestic product. Kemmsies said the U.S. since 2010 has been leading the recovery from the global recession, and because the American consumer has led every cycle since the 1980s, that bodes well for continued growth in containerized imports. “The recovery is real,” he said.