Cargo volumes at U.S. 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.”
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