Business Inventory Glut Hits US Ports, Container Imports Plunge in Peak Shipping Season…”That didn’t even happen during the Financial Crisis.”
by Wolf Richter
WolfStreet.com
November 15, 2015
September and October are part of the shipping season for US ports, a time when retailers, reveling in peak optimism, are loading up on merchandise for the holiday shopping season. But not this year.
At the three busiest ports in the US – the container terminals in Los Angeles, Long Beach, and around New York harbor which handle over 50% of the goods entering the US by sea – import volume in September and October fell by over 10%.
It was the “first time in at least a decade” that imports dropped during these key months, according to The Wall Street Journal, which had analyzed data from trade researcher Zepol Corp. A sudden shift in direction: volume in the prior months this year had been higher than last year.
So maybe November is the month when merchandise washes ashore. That’s the hope at the National Retail Federation.
But not yet. The Wall Street Journal cites Fernando Rios, owner of a small trucking company which picks up containers at the port terminals in Elizabeth, N.J.:
“At this time it’s supposed to be very busy, but it’s not,” he said. Only five of his eight trucks are currently running, and he has had to turn away drivers looking for work. Last year in September, he was moving 25 to 30 containers a week; this year it has been between 8 and 12.
Two possibilities explain this debacle, one worse than the other:
Economists are divided as to whether the peak season slump signals a short-term hiccup for the US economy, or marks the start of a sustained period of weakness.
There’s no shortage of reasons for these un-rosy scenarios. The economy has been flying at below “stall speed” and somehow can’t seem to pick up speed. Consumer spending growth has been sluggish, and retail spending has been flat for three months in a row. Strong auto sales this year have propped up overall retail sales. But ex autos, retails sales fell year over year.
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