Monday, January 12, 2009
Hawaii's ports are a little quieter these days.
Ocean shippers nationwide have been affected by a national slowdown in retail container traffic, which fell to its lowest level in four years in 2008, a report released this week shows.
Matson Navigation Co., which saw its container traffic in Hawaii slump by 7 percent and its auto volume decline by 8 percent for the nine months ending Sept. 30, is among shippers to feel the pinch of a pull back in home buying and construction. That contraction means fewer shipments of furniture and building materials, according to Paul Bingham, an economist with research firm IHS Global Insight.
A report by IHS and the National Retail Federation shows that year-over-year cargo volume at the nation's major retail container ports fell for the 17th straight month in December, making for the slowest year since 2004.
While Hawaii was not among the ports measured in the report, and its container traffic has not been as hard hit by the economic slowdown, the industry is still feeling the drop off in consumer spending, the contraction of home and construction markets, and the plunge in visitor traffic, Bingham said in an interview.
Nationwide, the single-biggest commodity category drop off by volume was furniture related to home sales, he said.
"Hawaii is a little more insulated because it was not subject to the extreme flow swings in the boom years," Bingham said. "There was less growth so the recession won't be as steep, but that's small consolation to Hawaii."
Nationwide, volume for the year was estimated at 15.3 million 20-foot containers or the equivalent, compared with 16.5 million 20-foot containers in 2007.
That is a decline of 7.1 percent and the lowest total since 2004, when 14 million 20-foot containers or the equivalent moved through the ports.
"We've seen decreases across the board," said Matson spokesman Jeff Hull. "We carry pretty much everything to support the state's economy, so when it declines we see drops in nearly every category, especially construction, retail and tourism-related goods."
The downturn in tourism translates into fewer shipments of rental cars, travel-related fuel, food and beverages, and retail goods, Bingham said.
"People aren't traveling. They are taking staycations, and that means that there is less consumption of tourism-related goods in Hawaii," he said. Port traffic is expected to continue to be slow due to an underlying weakness in demand, he said.
While some shipping companies have resorted to layoffs and reduced work hours to contain costs, Matson has not taken either step in Hawaii, Hull said.
"We have really looked at a lot of cost-control measures even prior to this recession, and we continue to look at a wide range of cost-control measures that can be put into place without undercutting our service," Hull said.
The company's next earnings report is due out Feb. 4.
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