Port cargo numbers feed fears of slowing economy
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Cargo traffic at the nation’s busiest seaport complex was down in August compared with the same month in 2010, suggesting that the sluggish U.S. economy has caused retailers to order fewer goods to sell this holiday season.
At the Port of Los Angeles, which is the No. 1 ranked port in the nation in terms of volumes, imports fell 5.75% compared with August of the previous year to 376,190 cargo containers. The big bright spot was exports for Los Angeles, which rose nearly 25% to 184,232 containers compared with a year earlier.
The Port of Los Angeles is on course for a record year of exports, but that was largely the extent of the good news. At the neighboring Port of Long Beach, which ranks second only to Los Angeles in terms of volumes, imports fell 14.2% to 267,198 containers compared with a year earlier. Exports through Long Beach were also down 3.8% to 121,277 cargo containers compared with the same month in 2010.
In 2010, August was the best month for the ports in an unusual, post-global recession year in which retailers were ordering lots of products to replenish record low inventories. But this year is still a question mark.
‘Retailers appear to be somewhat cautious going into the holiday season. We’ll know more as we see the September and October numbers,’ said Los Angeles port spokesman Phillip Sanfield.
Jock O’Connell, an economist for Beacon Economics, said that retailers might be hoping to keep inventories lean enough to be able to demand top prices for their goods rather than leave themselves in a position of having too much stock and having to discount prices. He added that they can only wait so long if they expect to have goods on store shelves by the holiday shopping season.
‘At some point, they have to pull the trigger,’ O’Connell said. ‘But all the economic forecasts seems to be pairing back from what they were saying a month ago. There was a hope that consumer demand would accelerate. I think there is a lot of hedging of bets right now.’
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