There was a modest improvement on exports due in part to a weaker dollar, but the nation's busiest ports saw outbound traffic at about the third the levels of what was coming in -- and there are no realistic prospects for more balanced trade in 2005, they say.
The port bottlenecks were largely cleared up by January, but the overflows entering in November and December -- plus anecdotal accounts - indicate some retailers were caught short on inventory at various time this past holiday season with no chance to reorder.
Also, the Asian tsunami did not appear to interfere with shipping or trade in the short run -- although the longer term implications of the tragedy are not yet clear, they add.
"November looked very strong -- imports continued unabated," said Clement Chin, business development manager for the Port of Oakland. He described the inflow of goods as an "avalanche."
Imports at Oakland were up 31% and exports rose by 12% in November while preliminary December numbers too showed substantial gains -- up 34% for imports and 10% for exports.
The Port of Oakland is capturing the overflow from the so-called Shanghai invasion at the Ports of Long Beach and Los Angeles, where cargo ships have been diverted because of congestion. But the strong volumes also reflect inventory replenishment and economic expansion.
He thinks the problems at the nation's gateway ports border on the permanent and smaller ports are poised for a transformation from ports of diversion to ports of new deployment for carriers frustrated by the yearlong bottlenecks and looking to spread out the distribution pipeline.
"Our industry severely underestimated growth for 2004. They were looking at one percent increases and got 12% to 14%," Chin said.
Compounding the problem was the Union Pacific railroad, undermanned from the start of last year when more employees jumped at early retirement than had been expected.
"That started the domino effect," Chin said. "You add terminal congestion, labor shortages at marine terminals, and the introduction of new 8,000 teu vessels and you suddenly have more than you can handle. We really had to step up to the plate and take the overflow from the gateway ports." The new 8,000 teu vessels are up to twice the size of earlier ones that they replaced.
He thinks the congestion is likely to recur in 2005. "The growth forecast is 10 to 14%, but capacity will only increase by 10 to 12%. That means demand (for port facilities) will continue to exceed supply."
Another issue for 2005 is that older, small vessels are rapidly being replaced by the 8,000-TEU behemoths. "That is an avalanche of cargo for ports to handle. It creates a huge challenge. It used to be that cargo came in smaller waves that were easier to unload and move into rail and highway systems," he said.
The problem is terminals are not capable of handling that much cargo all at once. "Last year, maybe one in five ships were of the 8,000-teu variety, this year it could be three of five. That will create a lot of disruption and really tax the transportation infrastructure."
Chin noted that exports are coming back, though clearly not at the same pace as the continuing growth in imports. "I think machine orders are up. We also see a lot of low-value commodities. As the dollar falls our products become more competitive, especially in Europe. And China continues to suck in raw commodities to feed its huge export engine."
Importers amply warned
Guy Fox, executive vice president of Stonepath Logistics, said the final two months of the holiday season looked "very steady" to him - with port backlogs skewing the import numbers to the upside.
Importers were amply warned to bring in holiday goods early, and most did, but t
