The report tracks business at 10 US ports: Los Angeles; Long Beach; Oakland, CA; Seattle; Tacoma, WA; Houston; New York/New Jersey; Hampton Roads, VA; Charleston, SC; and Savannah, GA. Produced for the federation by Boston-based economic research, forecasting and analysis firm Global Insight, it looks at inbound container volume, truck and rail car availability, labor conditions and other factors that affect cargo movement and congestion.
Jonathan Gold, NRF vice president for supply chain and customs policy, says the gap between last year's and this year's figures is narrowing, with October projected to show a year-to-year increase. "That's an important sign because October is when the largest share of merchandise sold during the holiday season usually comes through the ports," he explains. "November is expected to decline again, but the second half of the year is looking much better than the first half, and we hope to see the trend continue in that direction."
According to the report, US ports surveyed handled 1.31 million 20-foot-equivalent units (TEUs) of container traffic in May, the most recent month for which numbers are available. The figure is 3.4% above April's but 5% below May 2007. The report estimates monthly figures for June through September will be down 0.8% to 7.8% compared to last year before rising 1.7% in October.
Despite current declines, a report from Torto Wheaton Research shows the average vacancy rate at port-related facilities is lower than for any other industrial property type. According to the Boston-based company, vacancies in buildings serving ports stands at 7.7%, several points lower than for warehouse and distribution properties in general and about half the rate of manufacturing facilities. Moreover, port-related vacancy has on average run about 250 basis points lower than distribution properties since the beginning of '04.
While all ports tracked by NRF are currently rated "low" for congestion thanks to the fall in cargo volumes, a report from consulting firm MergeGlobal Inc. of Arlington, VA warns that major West Coast ports, which have benefited from proximity to Asia over the past several years, are projected to reach or exceed capacity by 2012. The company expects East Coast ports to benefit from this spillover.
Also according to MergeGlobal, only two of the world's top 15 ports, as measured by TEU volumes, are located within the US. On the other hand, nine are located in Asia and most of them have produced double-digit growth in TEU volumes over the last four years. The company says the growth discrepancy between US and Asian ports indicates a major challenge facing US property markets in coming years as investors increasingly view overseas markets as superior sources for value enhancement.
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