Friday, April 1, 2011

BCOs, Retailers See Strong 2011, Warn of Potential Japan, Middle East Impacts

Offering up the perspective of retailers and beneficial cargo owners for the Port of Long Beach "Pulse of the Ports" panel on Wednesday, Jonathan Gold, the Vice-President of Supply Chain & Customs Policy for the National Retail Federation, began with a recap of the 2009 recession and the recovery of 2010.

The retail industry saw sales drop 2.7 percent in 2009, only to rebound 3.7 percent in 2010. In addition, Gold said, import volumes in 2010 jumped 17.4 percent and holiday sales, originally projected at 2.3 percent, actually came in at 5.7 percent – the largest jump since 2004.

Gold predicted that despite facing challenges such as high unemployment, continuing issues with the housing market, rising fuel and commodity prices and legislative/regulatory uncertainty putting pressure on consumers, retail sales will increase 4 percent in 2011 with single digit percentage gains in import volumes.

Cargo volumes at both East and West Coast ports will continue to grow in 2011, Gold said, but the situation in Japan and unrest in the Middle East could have an impact on the rest of the year.

Gold said that some of the consideration that retailers look at in making their port decisions include: proximity to distribution network, operational efficiency, workforce stability, the ocean services offered, and fees and regulations.

"Things such as the Clean Truck Fee, infrastructure fees, hour restrictions, and also the politics at both the local and state level also have an impact," Gold said.

In Southern California specifically, the ports of Long Beach and Los Angeles face their own challenges. Gold said that things such as the efficacy of the current night gate system, turn times, the Clean Truck Program, current chassis programs and how they will work, and a strained infrastructure are all consideration looked at by retailers.

"Even as I say these are operational challenges, I think they are also opportunities," Gold said. "Opportunities for every stakeholder to come together and work out a viable solution, so that we can make sure the supply chain remains efficient, and make sure that every participant in the supply chains remains viable and continues to grow."