headline news from the most recent Port
Tracker survey by the National Retail Federation
(NRF) and research firm Global Insights
was that it continues to be mostly smooth
sailing through US ports in 2007 (See Retail
Container Traffic Smooth Despite Possible
LA/Long Beach Strike), but what
caught our eye is the dramatic slow down
in inbound container growth.
For a number
of recent years, inbound container volumes
were consistently rising 9-14% year over
year, and most projections called for continued
growth of 9-10% for a long run, as offshoring
continued at a breakneck pace.
Port Tracker report, however, shows a different
story. While total import volumes are setting
records, they are just barely doing so,
as growth slows to a trickle.
ports surveyed handled 1.37 million Twenty-foot
Equivalent Units (TEU) of container traffic
in May 2007, the most recent month for which
actual numbers are available. That was actually
down 0.2 percent from May 2006. We haven’t
seen declining volumes in quite a long time.
While a record
level of volume is expected for this September,
at 1.54 million TEUs, breaking the previous
record set last October, it represents only
a 3.4% increase from last September, way
off the levels we had seen until 2007.
causing the dramatically slowing growth?
Perhaps a slowing economy, perhaps opportunities
for outsourcing easing a bit, as rising
wages in China
and increasing transportation costs make
it less beneficial on the margin to go to
offshore. Maybe it’s Wal-Mart’s
continued struggles with its apparel business,
or the slow down at another big importer,
it’s good news for shippers, as congestion
should be mild for some time, and pressure
on rates from ocean carriers and even rail
carriers should moderate (and, in fact,
already have for ocean carriers).