By: Bill Mongelluzzo
Some shippers and port executives in Southern California, assessing trans-Pacific shipping prospects at the start of the peak season, say they believe cargo volume will increase modestly this fall rather than spiking sharply.
The busiest time of the year for retailers importing merchandise from Asia traditionally is in September and October. This year’s peak season will likely occur in those months, says Jonathan Gold, vice president supply chain and customs policy at the National Retail Federation.
Last year, eastbound trans-Pacific trade peaked in August. Retailers had experienced problems in early 2010 securing vessel space and equipment, so many importers shipped early to ensure their cargo would arrive in time for the holiday shopping season.
This year, even though cargo volumes are running about 6 percent ahead of last year through the first five months of the year, vessel space is ample and equipment is adequate, so retailers will wait until autumn to bring in most of their holiday merchandise, Gold told the Harbor Transportation Club of Southern California.
But with cargo volumes and retail sales flattening out in May, carriers and shippers are starting to believe volumes during the peak months of September and October will be only modestly higher than the winter months.
Daniel Gardner, CEO of non-vessel-operating common carrier Ocean World Lines, said his discussions with cargo owners as recently as last week indicate purchase orders going forward are running behind what the trade had anticipated.
The best indicator of this less-than-enthusiastic analysis of the peak season may be that freight rates in the eastbound trans-Pacific aren’t rising as they should be in June, Gardner said.
Terminal operator SSA Marine, which has operations nationwide, is hearing from its shipping line customers that while peak-season volumes will likely be up from last year, they won’t be up appreciably, said Ed DeNike, chief operating officer.
With a half-dozen new services this year in the Pacific, what little increase there is will be spread around more carriers, so existing carriers may feel like the 2011 peak season isn’t as good as it was last year, DeNike said.
If there is a positive message to deliver right now, it’s that vessel capacity, equipment availability, marine terminal capacity and the supply of waterfront labor should be sufficient to handle the cargo volumes this fall without serious delays or interruptions, the speakers said.