US ports' busy show improving economy

Import cargo volume at the nation's major retail container ports is expected to be up nine percent in December over the same month last year, and 2010 should end with a 17 percent increase over last year, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

"The nation's improving economy has been reflected in the amount of merchandise imported by retailers this year," NRF vice-president for supply chain and customs policy Jonathan Gold said.

"We haven't fully recovered from the recession, and we still need more job creation to get consumer confidence back where it should be. But import levels have seen solid increases throughout the year and we expect that to continue in 2011.

"Cargo volume doesn't translate directly to sales, but these trends are certainly in line with what we've experienced with monthly retail sales and this year's holiday season."

Those positive trends have seen the National Retail Federation revising its forecast to 3.3 percent, up from 2.3 percent. The upward revision is due to improvement in a variety of economic indicators including stock market gains, recent income growth and savings built up during the recession - all giving consumers the capacity to spend.

"The start to the holiday season has surpassed all expectations," said NRF president and CEO Matthew Shay.

"While employment data is still a concern, we are starting to see improvement in other economic indicators that support an increase to our forecast. In order to sustain this momentum for retailers and the US economy, there must be a renewed focus on jobs as we enter the new year."

November retail industry sales (which exclude automobiles, gas stations, and restaurants) increased 0.8 percent seasonally adjusted over October and 6.8 percent unadjusted over last year.

"Consumers have not been suffering from a lack of spending power, they've just been missing the confidence to use it," said NRF chief economist Jack Kleinhenz.

"With noticeable improvement in key economic indicators combined with great deals on merchandise, consumers have certainly shown they shouldn't be counted out this holiday season."

US ports handled 1.34 million TEUs in October, the latest month for which actual numbers are available. That was unchanged from September but up 13 percent from October 2009.

It was the 11th month in a row to show a year-over-year improvement after December 2009 broke a 28-month streak of year-over-year declines.

November was estimated at 1.25 million TEUs, a 15 percent increase over last year. December is forecast at 1.18 million TEUs, up nine percent from last year. January 2011 is forecast at 1.16 million TEUs, up eight percent from January 2010. February, traditionally the slowest month of the year, is forecast at 1.1 million TEUs, up 10 percent from last year, while March is forecast at 1.14 million TEUs, up six percent, and April is forecast at 1.18 million TEUs, up four percent.

However, as volumes increase in 2011, Hackett Associates founder Ben Hackett said retailers could see higher costs from "slow steaming," a practice of operating ships more slowly instituted by ocean carriers for both environmental and economic reasons.

"Shippers have not benefited from slow steaming," Hackett said. "The increased round-trip voyage time has a direct impact on the time cost of goods. As a result, costs have gone up along the whole supply chain with increased inventory and transportation costs."
(source:www.cargonewsasia.com)