Economy Means Slow Growth for Retail Container Traffic

WASHINGTON — Traffic at the nation’s major retail container ports will see weak or even negative growth compared with last year for the next several months as the nation’s economic slowdown continues, according to the monthly Port Tracker report released today by the National Retail Federation and Global Insight.

Container traffic at the ports is a leading economic indicator because it reflects retailers expectations for sales, NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. With the industry expecting the slowest growth in half a dozen years, we re going to see little increase in cargo on the docks.

With light traffic, little congestion is expected.

Most ports are operating without congestion from the harbor to the gate, Global Insight Economist Paul Bingham said. Seattle and Tacoma are threatened with near-term winter weather-related delays and are rated medium for congestion. But rail service showed continued adequate performance in January and apart from some weather disruptions intermodal rail operations are expected to continue to perform acceptably over the next six months.

Ports surveyed handled 1.3 million Twenty-foot Equivalent Units (TEU) of container traffic in December, the most recent month for which actual numbers are available. The number was down 6.4 percent from November s 1.39 million TEU, and 0.9 percent from December 2006. January was estimated at 1.28 million TEU, down 1.1 percent from January 2007, and February is forecast at 1.21 million TEU, down 7.6 percent from February 2007.

If the forecasts hold true, February will be the seventh month in a row to show a decline from the same month a year earlier as retailers reduced imports to reflect sales expectations. (August was down 1.4 percent, September 1.9 percent, October 3.5 percent and November 2.2 percent.)

February is traditionally the slowest month of the year for retail imports, and numbers are expected to resume year-over-year growth in March. March is forecast at 1.3 million TEU, up 2.5 percent over March 2007, April at 1.38 million TEU, up 4 percent over April 2007, and May at 1.4 million TEU, up 1.7 percent over May 2007. June is forecast at 1.44 million TEU, down 0.9 percent from June 2007.

The numbers come two weeks after the Commerce Department reported the weakest holiday season in five years at 3 percent sales growth and NRF issued its 2008 economic forecast calling for 3.5 percent growth, the lowest increase since 2002. NRF strongly supports legislation pending in Congress to boost consumer spending by providing taxpayers with rebate checks.

Seattle and Tacoma are currently rated at medium for congestion because of the potential for short-term delays related to winter weather. All other U.S. ports covered by Port Tracker Los Angeles/Long Beach and Oakland on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast are rated low for congestion.

Port Tracker, which is produced by the economic research, forecasting and analysis firm Global Insight for NRF, looks at inbound container volume, the availability of trucks and railroad cars to move cargo out of the ports, labor conditions and other factors that affect cargo movement and congestion. The report is free to NRF retail members. Subscription information is available at www.nrf.com/PortTracker or by calling (202) 783-7971. Non-NRF members can contact Global Insight Director of Business Development Diana Wyman at (202) 481-9265.

The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2006 sales of $4.7 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com

Global Insight Inc. is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world’s first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance, and government with revenues in excess of $95 million, over 675 employees and 25 offices in 14 countries covering North America and South America, Europe, Africa, the Middle East, and Asia. www.globalinsight.com

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