Container imports and exports declined at the Port of Oakland in December, indicating that retailers are still working through abnormally high inventories.
Oakland handled 69,661 loaded import containers and 69,384 loaded export containers in December—declines of 6.3% and 7.9%, respectively, from the same month last year. Oakland, the nation’s 8th-largest container port, was the first major U.S. port to report December cargo volumes.
The port attributed the year-over-year decline to an abnormally busy December last year, when vessels diverted from congested ports in Southern California.
The congestion worsened at ports up and down the West Coast in January and February, as negotiations between the coast-wide dockworkers’ union and their port employers dragged on. While the parties agreed to terms in late February, much of the cargo arriving from Asia had been diverted to East Coast ports, before slowly trickling back through the rest of the year.
As a result, volumes at West Coast ports were uneven for much of this year—peaking earlier than normal in the months of July and August and performing weakly in the traditionally-busy months of September and October. Analysts also attributed the poor peak season to high inventory levels among retailers who stocked up after the West Coast port congestion cleared.
A lot of merchandise “is stuck somewhere in the supply chain domestically,” said Jock O’Connell, an international trade economist. “Clearly a lot of retailers stocked up on goods several months ago and found by the end of the year that they were overstocked. Once that’s cleared out we could begin to see a pickup and more normal period of activity with respect to imports.”
Oakland reported full-year 2015 import volume was essentially flat with 2014. That’s below the 5.4% growth that analysts with the National Retail Federation predicted for imports at the nation’s major ports this year.
Exports were down 4.9% for the year at the Port of Oakland, which analysts have attributed to weak foreign economies and the continuing strength of the U.S. dollar.
“The dynamics driving export trade aren’t likely to soon change,” Mr. O’Connell said. “That doesn’t bode terribly well for export traffic through west coast ports.”
Source: Wall Street Journal