Hurricane Katrinas devastation at the Port of New Orleans isnt expected to have a major impact on the maritime shipment of retail goods, but could cause slowdowns in railroad operations that will make it take longer to move retail goods out of other ports, according to the monthly Port Tracker report released today by the National Retail Federation and Global Insight.
“Railroads are going to need to divert around the New Orleans area for a significant period,” NRF vice president and international trade counsel Erik Autor said. “That could result in a shortage of railroad cars and longer transit time for trains hauling merchandise away from other ports, particularly on the West Coast. Its too soon to get a full measurement of the impact, but the Port Tracker report has raised the congestion rating for two major port areas and we will be monitoring this situation closely.”
Autor said New Orleans is a major port for bulk commodities but not retail container shipments, minimizing the direct effect on the retail industry. Diversion of New Orleans-bound ships to other ports isnt expected to be a problem for retailers because those ships will be sent to other bulk commodity terminals with the proper equipment to unload them, not the container terminals used by retailers, he said.
Hurricane Katrinas damage is expected to have “a major affect on transportation infrastructure in the coastal region and north into the lower Mississippi River watershed,” Global Insight Global Transportation Group Principal Economist Paul Bingham said. “Traffic along the Gulf Coast will be subject to extensive detours, and port operations along the coast will be disrupted for an even lengthier time.”
Stress on the railroad network is reflected in the September issue of Port Tracker, which raises the congestion rating for the ports of Los Angeles/Long Beach and Oakland to medium from the August rating of low. The poorer rating is based on availability of rail transportation rather than congestion within the two ports themselves.
The other six ports covered by Port Tracker Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston and Savannah were ranked “low for congestion and none were at high. Tacoma and Seattle had been rated medium in August because they were seeing increased traffic because of a port trucker strike in Vancouver, but the strike has been resolved.
Nationwide, ports covered in the survey handled 1.25 million Twenty-foot Equivalent Units (TEUs) of container traffic during July, the most recent month for which historical data is available. The figure is up 5.7% from the same month in 2004 and 1.6% from this June. Over the reports six-month forecast period, traffic is expected to peak at 1.32 million TEU in October, up 7.4% from a year ago, before settling to 1.2 million TEU in January 2006, up 7.9% from January 2005. One TEU is a 20-foot cargo container or its equivalent.
The next six months should see continued increases in inbound container volume at Oakland, Seattle and Tacoma and slow, flat growth at LA/Long Beach. Overall, mid-year container volume growth has moderated from earlier in the year, running at less than 10 percent compared with double-digit growth in 2004. Oakland, Seattle and Tacoma have gained market share at the expense of LA/Long beach as shippers and carriers reacted to last years congestion. East Coast ports continue to benefit from all-water services from Asia, but new large-vessel capacity on the Pacific has helped ease the loss of West Coast market share to East Coast ports.
