Oct 7, 2005

Despite Hurricanes, Port Congestion LowSource: The National Retail Federation and Global Insight

Despite the recent hurricanes, congestion levels are low and cargo is flowing smoothly at the nation’s major retail container ports as merchants move into the peak shipping cycle for the annual holiday sales season, according to the October Port Tracker report released recently by the National Retail Federation and Global Insight.

“This is good news, especially when you compare it to the labor shortages, shutdowns and other problems we’ve seen in recent years,” NRF Vice President and International Trade Counsel Erik Autor said. “Holiday sales make up 1/5 of the retail industry’s revenue for the entire year, so this is the most crucial shipping cycle we face. Thanks to Port Tracker, we’re able to monitor and forecast port conditions and try to avoid delays that would keep products from reaching store shelves in time.”

“Going into the peak month of the peak season, the ports are in good condition,” Global Insight Principal Economist Paul Bingham said. “Transportation providers and shippers have made decisions that have reduced the pressure on the system compared with a year ago. Despite the disruptions to the national system from the hurricanes in the Gulf Coast, the risk of congestion now appears lower than we were concerned with last month. The slower overall growth in container volume has also contributed to this situation.”

The September Port Tracker report gave the ports of Los Angeles/Long Beach and Oakland a medium congestion rating out of concern that Gulf Coast damage from Hurricane Katrina would require railroad rerouting and slow down trains taking cargo away from other ports. Despite extensive local damage in the Gulf, the impact of August’s Hurricane Katrina and September’s Hurricane Rita on the national rail system turned out to be relatively modest. Consequently, Los Angeles/Long Beach and Oakland’s congestion rating was back at low this month. The remaining ports covered by Port Tracker – Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston and Savannah – were also ranked low.

Nationwide, ports covered in the survey handled 1.38 million 20-foot equivalent units (TEUs) of container traffic during August, the most recent month for which historical data is available. The figure is up 11 percent from the same month in 2004 and 3.5 percent from this July.