When retailers take a hit, everyone takes a hit.
According to a recent report, cargo volume at major retail container ports in the United States is expected to be nearly flat through July. Why? Because slowing consumer spending forced retailers to cut back on inventory and orders.
The global Port Tracker report, which was released earlier this month by the National Retail Federation and Hackett Associates, showed May traffic at ports in Oakland, Seattle, Tacoma, New York, Hampton Roads, Charleston, Savannah and Houston rose only an estimated 0.3 percent from a year earlier. Import cargo volume had been steadily accelerating for 17 months in a row up until April when it jumped by 7 percent.
Growth in inventories and import cargo levels has decelerated in proportion to the drop in consumer spending.
After taking a hit in 2009 and 2010, retailers are keeping an eye on their offshore spending. They’d rather sell out than mark down. They’ve reduced their offshore buys, which will cause a ripple effect throughout the economy, starting with the shipping and cargo industries.
Source: Reuters, June 2011
