Container imports broke a 2.5-year losing streak in December 2009, providing hope that the U.S. retail economy — and the nation’s major container ports — are poised to reawaken.
In addition, a key container shipping indicator underwritten by the National Retail Federation forecasts increases in imports throughout the spring and summer.
According to Hackett Associates, which forecasts container shipping with its Global Port Tracker index, the nation’s imports of 20-foot equivalent units (TEUs) increased 1.7 percent in December 2009 over those of December 2008. Until then, the major U.S. container ports had racked up 28 straight months of year-over-year decreases.
The Global Port Tracker, meanwhile, is forecasting year-over-year increases of between 9 and 25 percent through June.
Ben Hackett, who produces the Port Tracker, however, warns the recovery will be gradual, despite the double-digit figures. Hackett describes his outlook as cautious.
“Any increase is going to look good because of the trough,” Hackett said. “We will see increases year over year of 30 percent, but that doesn’t paint a true picture. In terms of import volume in Quarter I of 2009, any increase in 2010 would look good compared to that.”
Hackett predicts a speedier recovery on the West Coast than on the East Coast, because the trans-Atlantic trade will remain weak as Europe works through its difficulties.
Even restrained optimism will be welcome by the maritime shipping industry, which has seen some of its worst numbers in decades.
Art Wong, assistant director of communications and public information officer at Port of Long Beach, said that for years the port had enjoyed heady growth. Then in February 2009, incoming cargo volume suddenly plunged 43 percent.
“It was eerie,” he said. “We had had so many ships here, but then there were so few. There were no trucks. It was very quiet.”
Overall imports dropped 21 percent during 2009, after dropping 14 percent in 2008. Long Beach is the second busiest container port in the United States after Los Angeles.
Wong said his port’s own data is moving in the same direction as Hackett’s, and the flow of both ships and trucks has improved.
However, he too is tempering his enthusiasm, and said he will be waiting to see some positive movement in the nation’s unemployment numbers before proclaiming the worst is over.
Capt. Thomas Jacobsen, president of Jacobsen Pilot Service in Long Beach, also welcomed the increase in TEUs, but said he won’t be declaring victory until they translate into the ship moves which keep his 17 pilots busy. So far, the ships he has been piloting have been carrying more freight, but there are not as many because the ship operators have been forced to become more efficient.
Jacobsen, who has worked hard to hang onto his staff throughout the slowdown, said he is concerned that the damage inflicted by the downturn on the maritime shipping industry may take a while to be fully appreciated. Some companies are fighting for survival.
“Freight rates have plummeted,” Jacobsen said. “A lot of companies are barely hanging on. They are struggling.”
On the East Coast, Mike Leone, port director at the Massachusetts Port Authority, said he has high hopes for a turnaround in container traffic in 2010. Boston is one of the nation’s smaller ports and handles much less volume, but Leone is still looking forward to an upswing. He warned it will probably be modest — about 4 percent — and traffic there will not start to increase until springtime.
If cautious optimism appears to be the pattern that many in the shipping industry are seeing in the latest data, so is the possibility of a wildcard that would mean all bets are off.
Wong said one wildcard would be long-term, stagnant unemployment. Jacobsen said struggling shipping companies, increasing freight rates and a spike in fuel costs could easily starve a tentative recovery. And Leone added to that list a single act of terrorism just about anywhere in the country that could kill consumer confidence.