With retailers tightly controlling inventory, the nation’s largest ports are likely to finish the year with cargo volumes falling 4 percent after posting declines in each of the first six months of the year.
The number of 20-foot equivalent units, or TEUs, is expected to decrease to 15.8 million this year compared with 16.4 million TEUs in 2007, according to the National Retail Federation’s monthly Port Tracker report.
“Cargo volume reflects consumer demand as retailers work to keep inventory as tight as possible in order to keep supply and demand in balance,” said Jonathan Gold, NRF vice president for supply chain and customs policy. “If merchants can avoid having excess merchandise on hand, it means they can avoid the need for unplanned markdowns to clear their shelves, especially after the holiday season.”
Ports surveyed by Port Tracker include Los Angeles-Long Beach and Oakland in California; Seattle; New York-New Jersey; Charleston, S.C., and Savannah, Ga.
The report found that the number of TEUs handled in June at the nation’s major retail container ports dropped 10.3 percent from a year ago to 1.3 million TEUs. Declines are likely to continue through the summer and into the fall. An estimated 1.4 million TEUs are expected to have been handled in July and 1.4 million in August, representing declines of 5.2 percent and 2.7 percent, respectively. October, traditionally a peak traffic month as retailers stock shelves for the holidays, is forecast to have an increase of 1.1 percent to 1.46 million TEUs.
Paul Bingham, an economist with Global Insight, which produces Port Tracker for the NRF, said the declines for the year are in line with expectations given results from the first half. Global Insight’s economic forecast anticipates a particularly difficult fourth quarter, as consumers cut back further on spending and pressures from rising energy prices persist. Bingham said the recent spate of retail bankruptcies, including Mervyns, Boscov’s and Goody’s Family Clothing Inc., as well as emerging concerns over a second wave of housing mortgage issues, were factored into estimates.
“Basically, we’ve hit the bottom,” Bingham said of the 2008 estimates. “The only good news out of this is that it’s not going to accelerate or get worse, but by the end of the year we’re not back to positive territory.”
Bingham said a majority of retailers have taken steps to reduce inventory levels.
“We’re saying there’s a certain base level they’re not going to fall below,” he said.
Uncertainty surrounding contract negotiations between West Coast shippers and the International Warehouse & Longshore Union compounded problems at the twin ports of Long Beach and Los Angeles that combined handle about 40 percent of U.S. imports.
“I don’t think there was any question that the West Coast ports have been hit by that combination,” Bingham said. “The memories of six years ago when there was a work stoppage with the lockout was still in the minds of importers.”
A preliminary agreement was reached at the end of July, but Art Wong, a spokesman for the Port of Long Beach, said volume at the ports of Long Beach and Los Angeles declined 8 percent this year.
“Earlier in the year, we were hearing forecasts for things to pick up in the second half of the year, but there has been no sign of that,” Wong said after the agreement was reached. “In fact, we had the sharpest drop in June for the two ports that we have had in many, many months.”
Bingham said Canadian ports like Vancouver and Prince Rupert reported slight increases, as importers looked to avoid West Coast ports. He also has seen retailers become increasingly willing to invest the extra time and money necessary to utilize the Panama Canal for an all-water route to the East Coast.
“It was still worth it for some of [the retailer’s] to make sure their inventory can get into the country,” he said.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast