East Coast Port Volumes Slump
May 31 2016 - 2:01PM
Dow Jones News
By Robbie Whelan
Cargo volumes at the East Coast's two largest ports fell in
April compared with a year earlier, as retailers continue to
contend with high inventories and as West Coast ports continued to
reclaim market share lost during a labor slowdown last year.
Loaded imports at the Port of New York and New Jersey fell to
244,677 TEUs, or twenty-foot equivalent units, a common measure of
cargo volume. That was down 3.6% from March and down 2.6% from
April of 2015.
At the Port of Savannah, the East Coast's second-busiest port,
loaded import TEUs fell by 3.8%, compared with the year-earlier
month, to 130,208. Loaded imports ticked up slightly from March's
reading of 128,378.
In a typical year, the largest U.S. gateways for goods shipped
from Europe and Asia will see imports increase steadily through the
Spring and early summer, peaking in the months of August, September
and October, as retailers prepare for the back-to-school and
holiday shopping seasons.
But last year, a labor slowdown at West Coast ports, including
Los Angeles, Long Beach and Oakland, Calif., diverted tens of
thousands of shipping containers to the East Coast through the
Panama Canal. When the dispute between terminal managers and the
dockworkers' union was resolved, much of that cargo returned to its
regular routes from China and other parts of Asia across the
Pacific to the U.S. West Coast.
"Everyone was filling up all these special ships to go to the
East Coast to take pressure off of the west coast" last year,
skewing year-over-year comparisons of port volume, said Walter
Kemmsies, a port economist with real-estate firm JLL Inc. "I don't
think we'll be able to do a clean comparison until August."
Another issue is persistently high inventories among U.S.
businesses, including the retailers that import goods through big
gateways such as New York and Savannah. On Friday, the Commerce
Department recorded that U.S. GDP expanded by 0.8% in the first
quarter -- higher than many economists had expected, but still a
sluggish growth rate, dragged down by, among other factors,
inventory levels that remain high and slow to abate.
"The economy is still picking up, but the problem remains, we're
still in an inventory glut," said Cathy Roberson, founder of and
analyst with Logistics Trends & Insight LLC, an Atlanta-based
supply-chain consultancy. "The demand for new stuff just isn't
there yet."
Write to Robbie Whelan at robbie.whelan@wsj.com
(END) Dow Jones Newswires
May 31, 2016 13:46 ET (17:46 GMT)
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