Peak Season Shipping Roundup: Long Beach Port Traffic Down 7.7%
The port attributes the decline to high inventory levels and a slow start to the peak season.
Container volumes at the Port of Long Beach fell 7.7 percent in July compared to the same month in 2015 when harbor terminals handled a record amount of cargo.
Dockworkers moved 637,091 TEUs last month. Inbound containers totaled 325,608 TEUs, a 5.9 percent year-over-year decrease. Outbound containers reached 142,812 TEUs, a slight drop of 0.7 percent from July 2015. Empties decreased to 168,671 TEUs, 15.9 percent lower than July 2015, the port’s strongest July on record.
“Due to continued market uncertainty and high inventory levels, the traditional holiday peak season is off to a slow start and several national forecasts have been revised downward to reflect this softness in cargo movement,” the port said.
Uncertainty Yet Again
There’s that darn uncertainty cropping up again. Mercy.
If it’s any consolation, Economists Expect “Mount Everest” of Uncertainty to Clear Up by December.
However, the peak shipping season will long be over by December.
Concerned parties may also wish to read Comment of the Day Regarding Uncertainty.
Port Blames Inventories
Curiously, the port blamed inventories. The port authorities better get a hold of the Bloomberg Econoday writer pronto. On August 12, Econoday stated that inventories were in “favorable position“, specifically noting the “lean 1.39” inventory-to-sales ratio.
For further discussion, please see Investigating the “Favorably Lean” Position of Inventories.
Shocking Collapse in Services Final Demand
The disappointing news from the Port of Long Beach comes fresh on the heels of aHuge 6% Collapse in PPI Services Final Demand for Apparel, Jewelry, Footwearthat had economists shocked.
Cass Freight Index
Truck shipments continue to dive. Shipments in June of 2016 are down vs. June of 2015, 2014, 2013, 2012, 2011, and almost but not quite 2010. Shipments in July are down vs. 2015, 2014, 2012, and 2011.
Here’s a chart I created from Cass Freight Index data.
Intermodal Shipping Also Down
Earlier today I noted Intermodal Shipping Traffic Suffers First Dip in 25 Quarters.
Overall intermodal traffic in North America fell 6.1 percent in second quarter 2016, the first volume decline in 25 consecutive quarters, according to data from the Intermodal Association of North America.
Harper Petersen Shipping Rates Down
Above chart from Harper Petersen.
Retail Sales Flat
Economists missed the mark on retail sales this month by a mile. The Bloomberg Econoday consensus estimate was +0.4% in a range of +0.2% to +0.7%.
Instead of the expected gain, Retail Sales “Solidly” Flat.
Other than the above items, overall manufacturing weakness, and a massive downward revision to real wages from +4.2% to -0.4% (see Pocketbook Theory – Mish vs. Wall Street Journal), 2016 peak season shipping prospects look phenomenal.
The above chart originally stated Cass Index down 5.3% From June the Cass index is actually down 4.3%. About a minute after I made this post, July numbers came out from Cass. From July 2015, traffic is down 2.6% and expenditures down 5.1%.
Mike “Mish” Shedlock