Monday, April 02, 2007

Retailers predict record container volumes...maybe...

Retailers and large importers are being urged to plan ahead for their logistics needs as this year's peak shipping season is shaping up to be the busiest ever.

”This is going to be a very busy summer at the ports and it's important to keep those goods moving toward the store shelves,” said Eric Autor, vice president and international trade counsel at the National Retail Federation.

Autor’s comments came as the retail organization and the economic consulting firm Global Insight released the April Port Tracker, which forecasts monthly container flows at the top North American ports. The publication stated that container volumes are increasing rapidly and in July the United States will set a new monthly record for containerized imports, surpassing the previous record set in October, 2006 during the height of the peak season.

Container volumes will continue to build after July, most likely spiking in August and then again in October as retailers stock their shelves with merchandise for the holiday shopping season.

Despite the strong growth in cargo volumes, though, the port, rail and trucking industries appear prepared to handle the traffic without any serious congestion problems. Global Insight said U.S. ports are currently congestion-free and service levels in the rail and truck industries are adequate.

The ports will release their March container volumes soon, and Global Insight projects that they will show an increase of 4.7 percent compared to March, 2006. Volumes will continue to build, with July expected to show an increase of 11.4 percent from the year-ago month.

Growth at U.S. ports will be somewhat uneven through August, with Los Angeles-Long Beach and New York-New Jersey projected to experience the fastest growth.

Weather-related problems affected rail performance during the winter months, but soft traffic volumes reduced pressure on the rail network. Rail performance will return to previous levels as the weather improves across the country.

The port trucking industry has performed well throughout the winter months. Diesel fuel prices remain high, however, and implementation of the federal Transportation Worker Identification Credential program is scheduled to take place later this year. Truckers will have to pay fees to secure their TWIC cards, and eventually the background checks and proof of legal residency requirements in the program could reduce the driver pool.

Vancouver, Canada, has been the only North American port to experience congestion and delays this year. Weather-related problems this winter and a strike by Canadian National Railway workers caused lingering congestion problems at Canada's busiest port. Global Insight projects that the port will be back to normal by the end of April.

Any thoughts on the peak season this year? My guess is that it is going to be light/smooth transportation and port operations in North America this season...unless we get a major strike or an act of god situation...


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