Imports slumped at some of the East Coast’s busiest ports in May, as high business inventories and shifting trade patterns that favor the West Coast curbed volumes.
On Tuesday the Port Authority of New York and New Jersey reported that May loaded imports fell to 268,861 twenty-foot equivalent units – a common measure of shipping container volume – down 4.7% from the same month last year. The total volume of containers passing through the port fell by 6.1% in May.
Ports in Norfolk, Va. and Savannah, Ga. have also reported lower volumes, pointing to continued worries about the economy. Ocean shipping lines have been reducing the number of regular service calls in recent months, a sign that they expect demand to remain weak and business to be slow during the months leading up to the new school year and the holiday shopping period, when imports typically peak, said Ben Hackett, chief executive of Hackett Associates LLC, a research firm.
“The peak season has disappeared,” Mr. Hackett said. “Carriers have already taken out capacity, and if there was a strong peak season coming, they wouldn’t do that. It’s partly overall trade declining. But it’s also that importers simply bought too much.”
Total business inventories, or the value of products and materials that retailers, manufacturers and other companies keep on their shelves or stocked in warehouses, have been rising steadily since early 2015, including a 1% annual gain in April, the most recent month for which data is available, according to the Census Bureau. Retailers sitting on large amounts of inventory tend to import less.
Loaded import volumes fell 2.3% in May, compared with a year earlier, at the Port of Virginia, which has a major container terminal operation at Norfolk, and total volumes were down 4.7%.
At the Port of Savannah, the East Coast’s second largest point of entry for goods after New York, loaded imports fell by 5%, while total throughput was down by 7.3%, the Georgia Ports Authority said earlier this month.
The port of Charleston, SC, was a lone bright spot among major container ports on the East Coast, posting a 1.5% gain in loaded imports between May 2015 and May 2016, although total container volume, which includes empty containers and export loads, fell by 2.2% annually.
By Robbie Whelan, Via The Wall Street Journal