News, Trends, Analysis

Inbound traffic at retail ports could increase 25 percent in first half
The level of import containerized volume at major U.S. port gateways that handle heavy retail cargoes is projected to be 25 percent higher during the first half of 2010 compared with the same period a year ago, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

“This is a dramatic turnaround over what we’ve seen during the past two years,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy.

“Increases in import volumes don’t correspond directly with dollar volumes in sales, so caution has to be exercised when looking at these numbers. But retailers are clearly expecting to move more merchandise this year,” he said.

U.S. ports handled 1.09 million TEUs this past December, up 2.6 percent from December 2008, breaking a 28-month streak of declined, year-on-year monthly totals, the NRF reported.

January 2010’s box numbers are estimated at 1.19 million TEUs, a 17 percent increase over January 2009, and February, traditionally the slowest month of the year, is forecast at 1.1 million TEUs, up 30 percent from the previous year, the report said.

The retail group’s March cargo forecast is for 1.18 million TEUs, up 23 percent as retailers begin stocking up for the peak shipping season. April is forecast at 1.25 million TEUs, up 27 percent. May is pegged at 1.3 million TEUs, up 26 percent; and June is projected to hit 1.38 million TEUs, up 36 percent, according to the report.

The sum of the NRF’s first-half containerized volume would be 7.4 million TEUs, up 25 percent from last year’s 5.9 million TEUs, which ended last year down 12.7 percent from the 15.2 million TEUs handled in 2008.

Hackett Associates founder Ben Hackett disagrees in the report with other economists who have speculated the economy is in the middle of a “W-shaped” recover – or “double-dip” recession.

“This forecast assumes that we are not in a double-dip recession and that a recovery is underway,” Hackett said in the report. “Although 2009 saw decreased import activity levels, the forecast for 2010 points towards growth.”

The Global Port Tracker covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast.

Railroad group wants less federal regulation
Freight railroads are at a critical point in their history, facing new challenges from federal regulatory mandates, according to Association of American Railroads President and CEO Edward R. Hamberger.

At a press conference for the release of the AAR report, Great Expectations: Railroads and U.S. Economic Recovery, Hamberger contended freight railroads have been able to weather the economic downturn, but could face even more difficult times from federal policy-making.

“Freight rail is the only mode of transportation that is almost entirely self sustaining,” Hamberger said. Despite the 2009’s recession, freight railroads invested approximately $9 billion upgrading and modernizing the nation’s rail network, he said.

“We sustain a healthy national rail system with private capital and we also deliver tremendous public, economic and job benefits to American businesses and consumers.”

According to the AAR report, freight railroads generate nearly $265 billion in total annual economic activity, and directly or indirectly
support more than 1.2 million U.S. jobs.

The AAR also referenced that more than 90 percent of Amtrak’s passenger rail operation moves on track rights-of-way owned by the freight railroads.

The AAR’s report comes out on the heels of the news this week of the U.S. Department of Transportation’s announcement that $1.5 billion has been awarded out of the Transportation Investment Generating Economic Recovery (TGER) program. Freight rail improvements were one of the primary winners of the federal funds, including over $300 million for three major rail corridors – the 2,500-mile Crescent Corridor that originates in the U.S. Southeast, rail congestion improvements in the major rail hub of Chicago, and the National Gateway Freight Rail Corridor in Ohio, Pennsylvania, West Virginia and Maryland.

Nevertheless, the AAR report takes exception to what it terms “costly federal mandates” such as concerns over balancing Obama
Administration’s passenger rail initiative with freight right-of-way priorities; expanded, Federal safety regulations; climate change policy, and more overall regulation of the industry.

“Railroads face new policy initiatives that could hamper our ability to meet the great expectations America now has for rail to aid in our economic recovery,” Hamberger said. “Select legislative and regulatory proposals are creating an air of uncertainty at a time when there is already too much of that. When so much is riding on freight rail’s ability to sustain a healthy national rail network necessary to help America through to economic recovery, now is not the time to undermine our financial viability.”

Wal-Mart Canada to open $108 mil green distribution hub
Wal-Mart Canada announced it would open a refrigerated distribution center in Alberta, Canada later this year that is approximately 60 percent more energy-efficient than its traditional facilities.

The biggest box retailer said it would test hydrogen fuel cells in forklifts and install low-energy LED lighting throughout the $108 million hub.

Hydrogen fuel cells produce only heat and water as byproducts and will replace traditional lead acid batteries in the center’s entire material-handling fleet, Wal-Mart Canada said. LED lights operate at low temperatures and have longer life span Sixteen solar panels mounted on the side of the distribution center will supply clean, renewable energy to heat hot water. A 225-kilowatt on-site wind turbine will produce enough energy to supply 55 average-sized Canadian homes, the company said.

Profit plunge in 2009 for China’s biggest port equipment manufacturer
Shanghai Zhenhua Heavy Industry Co., China’s largest port equipment manufacturer, said its net profit in 2009 dropped between 60 to 70 percent due to weak demand brought on by the global economic downturn.

A decrease in the company’s financial assets income last year also contributed to the losses, the company in a brief statement filed with the Shanghai Stock Exchange in February.

The Chinese manufacturer said the result had not been audited, and it would announce specific figures in its annual business report.

Georgia governor prioritizes freight over commuter funding

Freight over commuter traffic funding was the mandate announced by Georgia Governor Sonny Perdue, to the tune of a $300 million transportation initiative.

The governor’s plans include improving the flow of trucks into and out of the Port of Savannah by the time Panama Canal
widens for post-Panamax ship traffic, due to be completed by 2014.

Port of Seattle could contribute up to $300 mil on new tunnel, seawall
The Port of Seattle announced in February its commission voted to approve a memorandum of agreement with the Washington State Department of Transportation (WSDOT) that could account for the port contributing up to $300 million for replacement of the waterfront’s transportation viaduct and seawall.

The aging, elevated Alaskan Way Viaduct is one of only three north-south transport corridors in the Puget Sound region and WSDOT’s plan is to replace it with a bored tunnel at an estimated total cost in excess of $3 billion.

“Tens of thousands of family-wage jobs are generated by our airport, air cargo, container, fishing, and cruise facilities, and if we can’t move people and goods efficiently, those jobs are in jeopardy,” said Port of Seattle Commission President Bill Bryant.

On the heels of an economically challenged 2009 where the Port of Seattle said it chopped over 6 percent of its workforce, among other budgetary cuts, the commission established a new policy for how tax dollars are used. The port said it has decided its seaport capital investments should be funded with seaport revenues, not levy funds, in order to leverage tax dollars for projects like the Lower Duwamish Waterway cleanup, air and water quality programs, and transportation improvements that support freight mobility.

“Our region faces several key investments right now that affect our quality of life,” said Commissioner Gael Tarleton.

The port commission announced its contribution to the tunnel and seawall replacement would not exceed $300 million.

In This Issue

Up Front

News, Trends & Analysis
News

Trade Tools: Missing money

Capitol Watch: Focus on job creation

Supply Chain
Chris Steele: Why you might be buying industrial real estate soon

Compliance Corner: Use the Web for denied party lists

Tech Trends: From open source to terminal visibility

Product Review: Trucking drayage and chassis management software

Commentary
David Bennett: Real signs of trouble

Gateway Glance
New England

Southern California

The Port Community
Bumpy Ride: Rebuilding PNW containerized exports

Southwest Intermodal: Can intermodal incentives show the way?

The Shipping Environment: Engaging in the community,
slow steaming, and new green products

Oceans are making waves

Casualties
The Big Texas spill leads off this month’s rundown

Final Say
Top 25 TIGER projects