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Nowhere Near a Peak Season This Year By Richard Knee The nation’s Pacific ports reported double-digit decreases in import traffic as the traditional June-November peak season kicked in — and the global recession isn’t the only reason. Since dock labor strife on the West Coast prompted many shippers to shift some of their East Coast-bound volume to all-water from intermodal routing in late 2002, West Coast ports have been struggling to get it back. Another shift in the same direction followed an episode of extreme congestion on the West Coast during the peak importing season in 2004. The trend reportedly continued during negotiations between dockworkers’ and marine terminal operators’ organizations in 2008, even though those talks proceeded relatively smoothly. Last year, the International Longshore and Warehouse Union and the Pacific Maritime Association “successfully negotiated a new contract. Historically, shippers diverted some cargo from the West coast during the ILWU contract negotiations. But because of the economic crisis last year, some of that cargo didn’t come back,” said Port of Long Beach spokesman Art Wong. “With the sharp drop in cargo, shippers don’t need the big ships that helped Long Beach capture market share in recent years. They can use smaller ships and smaller ports. When the economy begins to rebound, that cargo should come back to us because we have more capacity.” The Port of Portland, Ore., appears similarly affected, though perhaps to a lesser degree. “This trend does seem to be continuing,” spokesman Josh Thomas said. “However, we have not been handling as much intermodal in recent years although we do have the infrastructure as we are the middle or last port of call on our services. Being less dependent on intermodal is also part of why the downturn hasn’t been quite as severe for us. We expect the eventual battleground for cargo will occur in the Midwest, because as the economy recovers that will be the area most are targeting. USWC ports offer advantages in transit time and cost that will likely enter into those future decisions.” Maersk Line, a globally active carrier based in Copenhagen, has “seen an increase in services to the U.S. East Coast via an all-water route, a trend that began some years ago,” company spokesman Dana A. Magliola said. “Maersk Line’s new Suez routing on the TP3 service will increase this ratio moving to the U.S. East Coast via the Suez.” The West Coast volume decreases are affecting the entire range of consumer goods that typically come in before the start of school and in the inventory build-up for the holiday season, said Bob Glover, vice president of imports at Coppersmith, Inc., a freight services company in El Segundo, Calif. Japan has been hit particularly hard by the global economic downturn, Magliola said. Glover said the only bright spot has been in the food sector, with canned goods and seafood from China and Japan moving in strong volumes. Traffic in the items usually associated with the peak importing season clothing, footwear, TV sets, home sound systems, computers and appliances seemed up on a month-to-month basis from March and April levels, but “we’ve seen a relative dip” year-over-year, he said. The volume decline doesn’t necessarily signal a significant surplus of vessel space, because carriers have pared their fleet capacities in the trans-Pacific, he said. The capacity reduction has caused a 3.9 percent dip in ship traffic at Oakland, port spokeswoman Marilyn Sandifur said. Even so, Magliola said Maersk officials “anticipate being well equipped to handle current and projected cargo volumes.” Wong said January-to-May imports through Long Beach measured in 20-foot container equivalents, or TEUs, dropped 27.4 percent this year from the year-earlier volume. “We’ve dropped to the trade volumes of about six years ago. Trade experts were forecasting an upturn in the second half of the year. (It is) uncertain if we’ll see much of a rebound this summer or fall.” At Oakland, the January-to-May volume was off 17.7 percent from a year earlier, Sandifur said. “We are cautiously optimistic that there will be a peak season, but it will be tempered by the continuing global recession. We anticipate that the peak season will be shorter and less dramatic than in years past,” she said. January-to-May import traffic plummeted 32.3 percent at Portland, Ore., and Thomas said officials there expected “18-20 percent reductions for the second and third quarters, with continued declines until 2010.” “In light of present economic conditions, along with the general trend of lessened eastbound peak-season volumes, we do not expect to see a traditional peak season here, as could likely be the case for other U.S. ports,” he said. Port officials at Los Angeles, Seattle and Tacoma could not be reached for comment, but data obtained through their Web sites showed their import volumes were way down. January-to-June traffic fell by 21.7 percent at Seattle and by 14.9 percent at Tacoma. The January-to-May volume plunged by nearly 21.1 percent at Los Angles, the nation’s busiest container port. Wong, Sandifur and Thomas said their ports are well equipped to handle current and projected cargo volumes. Long Beach has “more than enough capacity to handle current volumes. Based on the latest projections, we should have enough capacity for at least another 10 to 15 years,” Wong said. Sandifur quoted maritime director James Kwon as saying the Port of Oakland “has ample capacity to handle peak-season demand if realized this year, at its berths, terminals, and intermodal rail yards. With importers looking at conveniently located transloading and distribution facilities, the Port of Oakland is well positioned to accommodate (the) peak season this year.” At Portland, “handling and storage are not problems for us, as we have the capability to accommodate roughly over three times what we expect to handle this year,” Thomas said.	In This Issue Up Front News, Trends & Analysis New Items The outlook is improving Supply Chain Federal chassis rules: Are you ready? 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Nowhere Near a Peak Season This Year