Product Moving Through Ports
By George Anderson
It doesn’t appear as though containers are going to be piling up on U.S. docks this year. Last year, an increase in goods coming into the U.S. from China and elsewhere left retailers waiting for delivery of merchandise as a logjam hit ports.
“It’s a relief not to have merchandise piling up on the dock,” said Erik Autor, vice president and international trade counsel for the National Retail Federation (NRF) in a released statement. “We have more cargo coming in than last year, largely because of the end of textile and apparel quotas, but it’s flowing much more smoothly from the ships to the stores than we saw in 2004. We’re about to enter the peak of the shipping cycle for the holiday season, so this is good news.”
The NRF’s has begun publishing its monthly Port Tracker report in response to the problems that arose with getting product to retailers last year.
“With the increasing volume of merchandise imported from overseas today, ports are the biggest potential bottleneck faced by retailers,” said Mr. Autor. “Retailers need information and forecasting data that can provide them with a better handle on cargo movement at the ports and let them change plans when there’s a problem. In the past, they had to rely on a grapevine of sources ranging from terminal operators to the longshoremen’s union to news accounts. Port Tracker is going to put an end to the guessing game and give retailers the hard, solid information they need.”
According to the NRF, Oakland, CA., Seattle and Tacoma, Wash. are expected to see significant increases in goods coming through those ports over the next six months. Ports including New York/New Jersey, Hampton Roads, VA., Charleston, SC and Savannah, GA are expected to experience increasing inbound container volume, according to the NRF, “because of increased use of all-water Asian container services through the Panama Canal and Suez Canal. Distribution center developments continue to drive a portion of port selection.”
Moderator’s Comment: How badly were retailers affected during the Christmas holiday selling season by the port problems experienced last year? What are
they doing to avoid having issues getting product on time for this year’s holiday season?
– George Anderson – Moderator
I don’t know about the answer to the current question but, in my supply chain reading, it sounds like there is a lot of congestion out there and the ports will be full again this year. So I was surprised to read that this year looks better.
The port problem has been growing for years. It was not so long ago that there was a shortage of containers. What I am seeing is that retailers are taking no chances and bringing in merchandise early. This has been the trend in recent years. The problem is storage costs. Retailers own the inventory before it leaves China; now they are just carrying it longer on the books. This reduces the profit, but it is cheaper than not having goods to sell. In general, there has been reasonable port investment, but the growing problem is transportation to move the goods from port to distribution center. Here the investment is lacking.