IMN: Reality Check: US June Imports Up, Exports Down vs. May
NEW YORK, Aug 9 (MNI) - Containerized import volumes to the U.S. strengthened in June from an active May, marking what may turn out to be the start of an early peak holiday shipping season, according to port officials and maritime executives.
Outbound flows, meanwhile, probably sagged some in June from May, amid signs of faltering demand here and abroad and the costly economics of moving shipping containers into agricultural regions that are home to the low-value commodities the U.S. exports.
Port officials said June capped a busier-than-expected second quarter as inventory replenishment met with both a moderate pace of economic recovery and catch-up activity following capacity constraints in the first quarter. But the trade outlook is as mixed as the incoming data on the broader U.S. economy, industry experts said.
"The surge does not mean that the economy has improved greatly, said Neil Dekker, editor of the quarterly Container Forecaster, published by Drewry Shipping Consultants, in London. Rather, he said, it has been a matter of "capacity dynamics."
"There was quite a big backlog of shipments to come out of China in June, caused by the lack of space earlier in the year," he said. "This backlog has artificially accentuated the strength of the peak season to a degree."
He also said U.S. retailers may be laying in stocks for the holiday shopping season earlier than usual this year, for fear of space or equipment shortages later on.
Dekker said the Forecaster's latest estimate for eastbound Asia-U.S. trade growth this year now stands at 8.5%, up from 5.4% in March. Westbound U.S.-Asia volumes are seen growing by 10% this year, compared with a March estimate of 8.6%. Global container trade is seen firming 8.5% this year.
At the nation's largest container port, Los Angeles, loaded inbound containers gained nearly 9% in June vs. May and swelled by 32% vs. a year ago, according to port statistics. Exports fell by about 4% on the month but gained almost 13% on the year.
"We know that a number of major importers instructed their logistics companies to move as much product as possible in preparation for the holiday season," said Jim MacLellan, directory of the port's trade services. Concerned about possible equipment shortages ahead, importers pressed for shipments in June and July rather than September and October, he said.
MacLellan said that capacity is returning to the trade lanes. Ocean carriers had slashed availability during the recession in response to drastically reduced trade volume. And as shipping capacity comes back on line, he said, the outlook for exports the rest of this year is likely to improve.
Edward Kelly, executive director of the Maritime Association of the Port of New York and New Jersey, which tracks vessel movements in and out of the sprawling East Coast shipping hub, said U.S. exports' current softness is likely due to a combination of slower global demand and "harsh economics."
"There is no economic sense in moving an empty container inland -- to a less-than-dense population base -- to handle a low-revenue commodity," Kelly said.
L.A.'s MacLellan noted the port's "consistent growth" since December, but said he's concerned that the fourth quarter may be sobering.
"A major component of this strong increase has been replenishment of inventories from last year's lower levels," he said. "I've heard a few murmurs that that's coming to an end, that inventories are replenished."
Across the harbor complex, at the second-biggest U.S. box port, June presented a mixed picture. On the month, import volumes flattened, and exports sank 16%. But compared to a year ago, inbound goods rose 9% and exports firmed nearly 13%, according to port data.
Port spokesman Lee Peterson sentiment around the port is upbeat, and he noted nine months of year-on-year growth for the port. But he said the outlook isn't clear.
"We're just not sure it's going to keep rebounding," Peterson said. "But just based on the number of ships I saw in July, I would expect another month of increases. There's a lot of cargo moving through."
He said June's month-on-month weaker profile is "pretty typical" for this time of year, when a lull in volume precedes the traditional start of the peak season.
The Port of New York and New Jersey also brought in a bifurcated performance in June. Containerized imports were flat to May and exports dipped about 6%, while year-on-year gains were 19% and 7.7%, respectively, according to port statistics.
Peter Zantal, general manager of the Port Authority's strategic analysis and industry relations, said he's unconcerned by the July fizzle. Indeed, the first half of 2010 has turned out so well for the nation's third-largest container port that Zantal said he's raised his full-year forecast.
"We're pleasantly surprised," Zantal said. "We were looking at a more gradual ramp-up."
He now expects total volume growth of at least 10% in 2010, about double what he had forecast at the beginning of the year. But 2011 growth may now come in at a more tempered 3% or 5%, compared with earlier expectations of 5% or 7%, he said.
Among imports, which account for nearly two-thirds of the port's container volume, furniture has increased 11% year-to-date vs. 2009, Zantal said. Auto parts, textiles, and toys have also advanced. Export increases this year include chemicals and agricultural products, he said.
While July is shaping up to be a "bang-up month," volume during the rest of the year may not be as energetic as in the first half, Zantal said.
"Jobs are not encouraging," he said of the U.S. employment situation.
Further south, the fast-growing Georgia port of Savannah registered brawny year-on-year gains in both directions and soggier month-to-month movements, according to port data.
Boxed imports to Savannah motored 38% higher in June vs. 2009, and exports climbed about 16%. But compared to May, imports dipped almost 2% while exports increased about 6%.
Back on the West Coast, at the Port of Oakland, Calif., containerized imports fared better than exports in June, according to port statistics. Imports rose 31% compared to 2009 and about 10% vs. May. Exports fell 11.5% on the year and 5.6% on the month, continuing a month-to-month downtrend in outbound goods begun in April, port data show. Year-to-date, however, Oakland's boxed imports are up more than 16%, while its exports are up by nearly 2%.
Up the coast, the Port of Portland, Ore. saw slowing activity in June as total tonnage, export and import container volumes, grain exports and auto imports all fell vs. May. Port spokesman Josh Thomas said volumes usually dip ahead of the traditional peak season, and August should bring renewed volume.
"At this point, we're still down on the year," Thomas said. "The container side has not been performing as well as we'd like. Equipment has been a challenge for us." New shipping services should boost the box figures beginning as early as July, however, he said.
The Port of Seattle saw containerized imports nearly double in June vs. a year ago, according to port statistics. Three new shipping services that launched last summer may have accounted for much of that gain. Imports gained a slimmer 4% vs. May. On the export side, volume rose 10% vs. June 2009 but fell more than 17% vs. May.
On the Gulf Coast, the Port of Houston Authority's containerized imports grew 25% on the year and 4% on the month, according to data provided by the port. Boxed exports increased 7% vs. June 2009 but edged 2% below May's figure. Year-to-date through June, Houston's boxed imports posted a 7% rise and its exports a 6% increase.
Houston's June inbound steel volume galloped 80% higher vs. 2009 but shed 26% vs. May. Outbound steel volume tanked by 70% vs. 2009 but more than doubled vs. May. And for the year, both steel imports and exports were off by nearly 50%.
Across 10 major U.S. ports, containerized import volumes rose 4% in June vs. May and raced 30% higher than a year ago, according to a tracking survey conducted by the National Retail Federation and consulting firm Hackett Associates. Here too the interpretation is measured.
"Cargo numbers this summer are showing unusually high percentage increases, but that appears to be an indication of shortages in shipping capacity earlier in the year rather than sales expectations," Jonathan Gold, NRF's supply chain vice president, said in a statement.
The Commerce Department is scheduled to release June international trade data on Wednesday at 8:30 a.m. ET.
Editor's Note: Reality Check stories survey sentiment among business people and their trade associations. They are intended to complement and anticipate economic data and to provide a view into specific sectors of the U.S. economy.
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