NEWS - Ports & Transportation

SBJ Staff Report

Dec 19. 2011 - According to Page Siplon, executive director for the Center of Innovation for Logistics in Savannah, there is significant, positive industry news, and general economic information that supports an optimistic view for 2012.

While total container traffic in the U.S. was down 6.7% in October 2011, with import container volumes down by 9.43%,  export loaded volumes were up by 3.48% for the month and break-bulk commodities continued to lead annual growth, reporting October increases of 10.4% - handling 207,545 tons.

In September 2011, the Port of Brunswick recorded 56.2% growth over last September’s 110,403 tons, to reach 172,453 tons for the month. (Source: GPA)

The Port of Savannah’s intermodal capacity will be increased by a $6.5 million project to add 1.2 miles of rail track at the container transfer terminal. After completion of the project later next year, the ports’ intermodal facilities will have nearly nine miles of rail track served by CSX and Norfolk Southern.

The retail shipping industry forecast a 0.3% increase in December container imports through major U.S. ports and raised its outlook for the 1Q 2012. December retail container traffic is expected to total 1.15 million TEUs. The forecast for January 2012 was revised upward to 1.15 million TEUs from the previously forecast 1.1 million TEUs.

Several carriers have announced planned rate increases at the start of January, marking a rebound in trans-Pacific spot rates after prices hit their lowest point in 23 months recently. Stronger retail sales in the U.S. and an early Chinese New Year are rebuilding confidence in the companies.

The liner carrier Mediterranean Shipping Co. has added the Port of Savannah to its Golden Gate service between Asia and the U.S. East Coast. The service is currently operated with 12 MSC vessels which have an average capacity of 7,996 TEUs.

In general logistics news in the South and around the U.S., highlights by Siplon include:

- The November shipments index fell 2.3% from the previous month and decreased 2.9% year-over-year. The November expenditures index was down 1.2% for the month, but increased 14% year over year, based on information from 400 shipping companies tracked by Cass Information Systems.

- In October, the U.S. imported about $222.6 billion of cargo. October U.S. imports have decreased 1% in terms of value over the previous month, but grew 11.9% year-over-year.

- In October, the U.S. exported more than $179.2 billion of cargo. October U.S. exports have decreased 1.5% in terms of value over the previous month, but grew 12.3% year-over-year.

- U.S. import prices rose 0.7% in November following declines of 0.5% and 0.1% in the previous months.

- Dollar General says it will open 1,425 stores by the end of 2012, expand its offering of perishable goods, and source more products from northern and western China. The company increased its inventory 4.6% year-over-year in the 3Q, largely due to the opening of 482 new stores and expansion of 544 others.

- Railroad bulk carload freight in November 2011 increased 0.9% over October 2011. Freight traffic in November also increased 2.3% over November 2010, and was up 7.6% over November 2009.

- Intermodal rail traffic in November 2011 was 3.8% higher than November 2010, and 0.8% higher than October 2011 totals. Intermodal loadings have experienced year-over-year gains for 24 straight months.

- In November 2011, short line railroads across North America saw shipments rise 4.6% over the same month last year. A sampling of about 397 small railroads in the U.S. and Canada loaded 529,454 railcars and intermodal units during the month of November.

- Cordele Intermodal Services, Inc. ran its first intermodal train on December 1. CIS hopes to make Cordele, GA the next transportation hub in the southeast United States. The inaugural route from the Port of Savannah to its intermodal facility in Cordele marks the start of regular rail service between the two cities.

- North American railroads’ seasonal peak in shipment may be extending into December to accommodate an increase in online Christmas shopping boosts demand for moving packages. Railroad intermodal units rose 4.7% in the first week of December. That growth rate may increase in coming weeks as shippers such as FedEx and UPS use railroads for delivery of online purchases.

- Over-the-Road Trucked Shipments rose 0.1% in November following a 1.1% increase in October. Overall trucked shipments increased 0.9% on a year-over-year basis.

- The trucking industry added 3,600 jobs in November. The trucking workforce increased 0.28% over the previous month and rose 2.7% over the previous year.

- There was a 12% increase in refrigerated food shipments sent spot market rates for refrigerated trucks up almost 2% during the Thanksgiving week. Reefer rates and refrigerated freight demand are expected to remain high through mid-December as grocery stores and food retailers stock up on holiday fare.

- Global air freight in October fell 4.8% from one year ago and was down 0.9% from the previous month. North American air freight in October fell 5% year-over-year.

- In October, Hartsfield-Jackson Atlanta International Airport transported 54,994 metric tons of cargo, a 2.26% increase over the previous month and a 4.46% decrease year-over-year.

- Shortages of hard disk drives caused by the flood in Thailand will result in a shortfall of 3.8 million shipment exports of PCs in the first quarter of 2012. Thailand’s share of global HDD production is estimated at 40%-45%, and at least half of that capacity has been directly affected by floods. Worldwide PC shipments in the first quarter of 2012 will amount to 84.2 million units, compared to an earlier forecast of 88 million units.

- The pharmaceutical logistics segment will grow 12% this year to $63 billion. Biotech and pharmaceutical products represent the highest value per airlifted pound for any cargo. UPS has invested in five new pharmaceutical facilities in the past year and Lufthansa’s cargo unit will dedicate six MD-11s by 2015 to handle pharmaceuticals alone.

Overall, Siplon sees four U.S. economic statistics as positive:

1.      CONSUMER CONFIDENCE:  The consumer confidence index Increased to 56 in November 2011 from 40.9 in October 2011. November’s index reading was at its highest level in four months, and was the highest month-to-month increase since April 2003.

2.      UNEMPLOYMENT:  Georgia's unemployment rate fell sharply in November to 9.9% the largest one-month decline in 34 years.  The National unemployment rate also fell to a 2-1/2 year low of 8.6% in November.

3.      SHOPPING – “Black Friday”:  Consumers cumulatively spent an estimated $52 billion during the holiday shopping rush, up 16.4% from last year.  According to the National Retail Federation, a combined 226 million people visited brick-and-mortar and online stores during the four-day Black Friday shopping window, an increase of 14 million shoppers over last year.

4.       SHOPPING – “Cyber Monday”:  Shoppers spent a record $1.25 billion online on Cyber Monday, a 22% increase over last year. This made it the heaviest U.S. online spending day in history and only the second time the U.S. has ever spent more than $1 billion online in a single day.