Industry News

Import cargo volume at the nation’s major retail container ports is expected to be up 8 percent in April compared with the same month a year ago, and solid increases are expected to continue through the summer as the U.S. economy improves, according to the monthly Global Port Tracker report released today by NRF and Hackett Associates.

“Retail sales are starting to improve and retailers are importing merchandise in the quantities they need to meet that demand,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “We expect these numbers to continue to climb as merchants and their customers move away from the recession and back toward normal shopping habits.”

U.S. ports handled 1.01 million Twenty-foot Equivalent Units in February, the latest month for which actual numbers are available. That was down 6 percent from January as shipping hit its traditional slow point for the year but up 20 percent from the unusually low numbers seen during February 2009. It was also the third month in a row to show a year-over-year improvement after December broke a 28-month streak of year-over-year monthly declines. One TEU is one 20-foot cargo container or its equivalent.

March was estimated at 1.02 million TEU, a 6 percent increase over last year as spring products began to head for store shelves. April is forecast at 1.07 million TEU, up 8 percent from last year; May at 1.12 million TEU, up 7 percent’ June at 1.18 million TEU, up 17 percent; July at 1.24 million TEU, up 12 percent; and August at 1.32 million TEU, up 15 percent.

The first half of 2010 is expected to total 6.5 million TEU, up 10 percent. Imports for 2009 totaled 12.7 million TEU, down 17 percent from 2008’s 15.2 million TEU and the lowest since the 12.5 million TEU reported in 2003. The forecast for first-half growth is down from the 17 percent increase projected a month ago as more recent data becomes available.

“Port volumes have begun to rebound and we expect growth to continue going forward,” Hackett Associates founder Ben Hackett said. “Retailers were maintaining lean inventories during the recession but are carefully building back up.”

According to a report in the Los Angeles Time by Ronald White, there may be some positive signs ahead for International shippers, third party logistics and distribution warehouse companies in 2010.

America’s largest ports, including the Port at Long Beach California appears to be poised for a strong recovery.  Cargo volume at ports on the Atlantic, Pacific and Gulf coasts were higher in December than a year earlier, the first such gain in 28 months, according to the National Retail Federation.

Komar Distribution concurs with that data as KDS witnessed an increase in retail goods shipments from their manufacturing partners overseas.  KDS saw a spike in retail goods pass through their California Distribution Warehousing facilities in December and the trend continues into the New Year.  One area that showed great promise was in retail apparel where KDS is a specialist in Apparel Warehouse services to America’s largest retail chains.

Economists who track volume at the nation’s busiest ports each month called the new report the strongest sign yet that the bottom-dwelling days are over.  From channel checks with Komar Distribution Services (KDS) clientele, the future shipment and distribution pipeline looks to be on a rebound.

According to the Los Angeles Times article:

“It’s the first strong sign that a recovery is finally underway, and it’s being driven mostly by retailers restocking their inventories and by the impact of the economic stimulus package,” said Ben Hackett, founder of Hackett Associates, a business consulting firm that tracks seaport, railroad and trucking industry volumes for some of the nation’s biggest retailers.

Hackett predicted that monthly imports would remain above last year’s levels for at least the first half of 2010.

Hackett said the strongest gains in volume would be on the West Coast. That’s particularly important because international trade provides so many of the region’s jobs. The company tracked activity at ports in Los Angeles, Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Virginia, Charleston, S.C., and Savannah, Ga., on the East Coast; and Houston on the Gulf Coast. In 2009, a total of 12.7 million containers came into those ports, the lowest figures since 2003 and a decline of 17% from the 15.2 million in import containers in 2008. But there was a slight uptick of 1.7% in December from a year earlier.

At L.A. and Long Beach, the improvement will be most obvious in February, the report said, when about 496,000 containers are expected to come into the twin ports, which would be an increase of 40% from February 2009, the ports’ worst month of the recession.

The report said that Los Angeles and Long Beach should see growth of about 3%, or about 3.3 million containers, through June, compared with the first half of 2009.

Local port directors have been looking for just such an indication for several months. L.A. and Long Beach are the two busiest container ports in the U.S., followed by New York/New Jersey and Savannah.

Komar Distribution Services, a division of New York–based Charles Komar and Sons, is on a mission to grow its business on the West Coast.

What began two years ago as a 350,000-square-foot distribution center in San Bernardino, Calif., for Charles Komar and Sons’ own brands—which include sleepwear and intimates labels—has now grown into Komar Distribution Services, a back-office and distribution-services provider.

The company, which has operated a distribution center out of McAlester, Okla., for approximately 80 years, made the move west to satisfy its own distribution needs and quickly found brands eager to use its facilities and resources.

Ron Weissbrod, Komar’s vice president of business development, said Komar currently has approximately 10 customers being serviced out of the San Bernardino location. Those customers represent 15 percent to 20 percent of Komar’s business out of the West Coast location, and Weissbrod expects that number to more than double in the next several years.

He declined to name Komar’s current clients. But Weissbrod said customers include domestic and international swimwear, sleepwear, intimates, sportswear, dress, and children’s and juniors brands that retail in major and big-box retailers through to specialty stores and independent boutiques. Client testimonials on Komar’s Web site count Liz Claiborne Sleepwear among its satisfied customers.

In Down Economy – Interest is Up

As the economy forces companies to cut spending and reduce overhead, interest in Komar’s services has never been higher, Weissbrod said. “A good example is that of a swimwear company that only uses its warehouse 50 percent of the year, when it is actually shipping goods. The rest of the year the warehouse sits empty, but it is being paid for,” he said. “With this economy, companies are looking for ways to increase their efficiency.”

With its 40-plus employees and state-of-the-art facility, Komar’s San Bernardino location offers apparel imports, warehousing, distribution, pick and pack, supply-chain management, customer service, accounting and back-office systems for bigger operations as well as boutique brands. “Everyone needs to lower their overhead,” Weissbrod said.

He declined to discuss Komar’s fee structure, but Weissbrod said most companies, whether they have their own distribution and back-office operations or outsource them, would realize savings. One way Komar could fatten a company’s bottom line is by reducing the kinds of costly mistakes that are often made when shipping to new accounts as well as big box or major retailers. “We work with so many retailers—and have for nearly 100 years—that we know their specific requirements,” he said. Meeting shipping requirements and “virtually eliminating chargebacks” make for significant client savings.

Technology—which allows Komar to track goods from overseas factories onto boats, into and out of the warehouse, and onto the sales floor—is another money-saving bonus. “If a company knows where every single piece of product is at any given time—from the moment the order is placed to when it is cut and sewn down to whether it has been invoiced and when it is paid—they have so much more to work with and can be more agile,” Weissbrod said.

Komar Technical Prowess

With the influx of interest and business, Komar is keen on staying at the forefront of technology—from developing proprietary software that enables it to keep clients informed in real time as to the status of their goods to implementing Electronic Data Interchange (EDI) mapping and compliance with “nearly every major retailer.” The facility is also Radio Frequency Identification (RFID)–enabled, something that is becoming a key factor for companies selling goods to the likes of Wal-Mart and other big-box stores.

“We are very technology-focused,” said Melinda Cook, Komar’s director of customer service. “Our array of services and clients requires us to be at the forefront of what is going on. It’s how we save our clients money and run our own business more efficiently.”

To communicate with clients, Komar has developed a software that is installed directly onto clients’ computers. The dashboard, as it is called, gives clients constant access to reports such as sales reporting and history, gross margin analysis, style master management, reserve and bulk order management, inventory forecasting, production-order status, and real-time inventory visibility and control, a release from the company states. “The software makes everything visible and transparent. And it eliminates the hundreds of e-mails from different people that would otherwise be necessary from the moment a purchase order is written until it is delivered,” Cook said.

Currently, each client’s record is updated multiple times a day so they can track the progress of their goods in real time.

“The minute a shipment passes through our dock doors, it is in our system,” Weissbrod said. “That means a client can turn stock as soon as it comes in— and that is something that is a big advantage in the current market,” he said.