Troubled by conservative estimates for shopping during the holiday season, imports remain below last year’s levels, a new report says.
According to the monthly Port Tracker report released by the National Retail Federation and Global Insight, traffic at major retail container ports in the U.S. dropped below last year’s levels for the fourth month in a row in November.
Analysts forecast that the overall weak economy will not recover immediately. “We don’t see a recovery until the second half of 2008,” Paul Bingham, an economist for Global Insight, told Fleet Owner. However, he added that it is possible the upswing may begin as early as March or April of next year, even if the economy doesn’t fully recover until later in the year.
Freight is still growing, Bingham said, but at a far slower pace than in the past. He added that retailers exercised more caution this holiday season and ordered less goods as they saw a bigger gamble in ordering extra inventory than the possible benefit of increased sales. In turn, they accepted the lower potential for sales.
According to the report, the ports surveyed handled 1.36 million Twenty-foot Equivalent Units (TEU) of container traffic in November, down 3.5% from the previous year. October, traditionally the strongest month of the year for freight, was estimated at 1.46 million TEU, down 3.5% from 2006, and both August and September of 2007 were more than a percentage point below last year’s levels.
The report says that volume will continue to trend downward through February, which is usually the slowest month of the year, but March and April of 2008 are projected to be more than 6% higher than 2007 levels.
Port Tracker covers ports in Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, Savannah, and Houston. It notes that all the ports are currently rated “low” for congestion for the second straight month.
“The weak economy has been driven sharply by a few segments, especially the housing industry, which has had its sharpest drop in two decades,” Bingham said. He added that the weakness in housing will probably take longer to recover than the general economy, and most likely won’t occur until at least 2009.