Imports at the nation's 12 major container ports are expected to grow steadily through the rest of spring and summer despite the prospect of heavy tariffs imposed on goods from China, according to the monthly "Global Port Tracker" report released yesterday by the National Retail Federation (NRF) and consultancy Hackett Associates.
The ports handled 1.54 million twenty-foot equivalent unit (TEU) boxes in March, the latest month for which final numbers are available. That was down 8.6 percent from February because of Lunar New Year factory shutdowns in Asia during March, but down only 0.7 percent year over year. A TEU is one 20-foot-long cargo container or its equivalent.
April was estimated at 1.73 million TEU, up 6.4 percent year over year. May is forecast at 1.82 million TEU, up 4.3 percent from last year. June is also forecast at 1.82 million TEU, up 6.1 percent. Looking to the summer, July is projected at 1.9 million TEU, up 5.5 percent; August at 1.92 million TEU, up 4.6 percent; and September at 1.82 million TEU, up 2.1 percent.
The July and August numbers, if they come to fruition, would each set new records for the number of containers imported in a month, beating the previous high of 1.83 million TEU in August 2017, according to the report.
The first half of 2018 is expected to total 10.4 million TEU, an increase of 5.8 percent over the first half of 2017, according to the report. The 2017 total was a record 20.5 million TEU, up 7.6 percent from 2016's previous record of 19.1 million TEU.
In a statement, Jonathan Gold, NRF's vice president for supply chain and customs policy, said the strong near-term numbers may be affected by retailers stocking up before the imposition of threatened tariffs drives up the costs of merchandise. In late March, the Trump administration said it would place a 25-percent tariff on more than 1,300 imported goods from China as a way to penalize China for its trade practices.
The Chinese products that have been targeted, for the most part, represent higher-value items like flat-screen televisions, medical devices, aircraft parts, and batteries. The list mostly de-emphasized lower-value goods like apparel and footwear that Americans buy every day and that NRF feared would be included.
Gold affirmed NRF's concerns about the impact of the administration's actions, given China's prominence as a source of goods that are consumed by Americans. "If tariffs do take effect, there's no quick or easy way to switch where these products come from. American families will simply be stuck paying higher prices, and hundreds of thousands of U.S. jobs could be lost."
Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle, and Tacoma, Wash., on the West Coast; New York/New Jersey, Port of Virginia, Charleston, S.C., Savannah, Ga., Port Everglades, Miami, and Jacksonville, Fla., on the East Coast; and Houston on the Gulf Coast.
Mega-retailer Amazon says its newest fulfillment center, located in Shreveport, Louisiana, uses 10 times more robots than previous warehouse designs, and relies on artificial intelligence (AI) to direct the eight different models deployed in its bustling operation.
“Over the years, we’ve built and scaled the world’s largest fleet of industrial robotics that ease tasks for employees and improve operational safety while creating hundreds of thousands of new jobs along the way,” the company said in a blog post Wednesday. “For the first time, we have introduced technology solutions in all key production areas at the site, meaning our employees will work alongside our growing fleet of robotic systems seamlessly in a way that wasn’t possible until now.”
The Shreveport site spans five floors and more than 3 million square feet—equivalent to 55 football fields—making it one of Amazon's largest sites. It will employ 2,500 employees once it’s fully ramped up.
The technology at the center of the huge building is called Sequoia, a “multilevel containerized inventory system” that can hold more than 30 million items, making it five times bigger than Amazon’s first deployment of that system in Houston, Texas.
As inventory and packages move through the facility, Robin, Cardinal, and Sparrow—an AI-powered trio of robotic arms—sort, stack, and consolidate millions of items and customer orders. The latest version of Sparrow uses computer vision and AI systems that give it the versatility to handle over 200 million unique products of all different shapes, sizes, and weights.
And Proteus, which Amazon calls its “first fully autonomous mobile robot,” navigates carts of packages to the site’s outbound dock so they can be loaded into trucks, while safely moving around employees in open spaces. The remaining three robot models include larger AMRs called Hercules and Titan and a packaging automation system that creates custom-sized packages to fit each order’s dimensions.
Although the increased automation allows the facility to handle more orders than older sites, Amazon insists it is not replacing workers’ jobs. “As we deploy this new generation of robotics across our network, we expect our headcount to continue to grow and we’re really excited by how this technology also creates more opportunities for skilled jobs. In fact, our next-generation fulfillment centers and sites with advanced robotics will require 30% more employees in reliability, maintenance, and engineering roles,” the company said.
According to Amazon, it trains workers for skilled jobs by helping them earn certifications through a corporate “Career Choice program” and a “mechatronics and robotics apprenticeship” that provides hourly wages up to 40% higher than entry-level roles.
For example, millions of residents and workers in the Tampa region have now left their homes and jobs, heeding increasingly dire evacuation warnings from state officials. They’re fleeing the estimated 10 to 20 feet of storm surge that is forecast to swamp the area, due to Hurricane Milton’s status as the strongest hurricane in the Gulf since Rita in 2005, the fifth-strongest Atlantic hurricane based on pressure, and the sixth-strongest Atlantic hurricane based on its peak winds, according to market data provider Industrial Info Resources.
Between that mass migration and the storm’s effect on buildings and infrastructure, supply chain impacts could hit the energy logistics and agriculture sectors particularly hard, according to a report from Everstream Analytics.
The Tampa Bay metro area is the most vulnerable area, with the potential for storm surge to halt port operations, roads, rails, air travel, and business operations – possibly for an extended period of time. In contrast to those “severe to potentially catastrophic” effects, key supply chain hubs outside of the core zone of impact—including the Miami metro area along with Jacksonville, FL and Savannah, GA—could also be impacted but to a more moderate level, such as slowdowns in port operations and air cargo, Everstream Analytics’ Chief Meteorologist Jon Davis said in a report.
Although it was recently downgraded from a Category 5 to Category 4 storm, Milton is anticipated to have major disruptions for transportation, in large part because it will strike an “already fragile supply chain environment” that is still reeling from the fury of Hurricane Helene less than two weeks ago and the ILA port strike that ended just five days ago and crippled ports along the East and Gulf Coasts, a report from Project44 said.
The storm will also affect supply chain operations at sea, since approximately 74 container vessels are located near the storm and may experience delays as they await safe entry into major ports. Vessels already at the ports may face delays departing as they wait for storm conditions to clear, Project44 said.
On land, Florida will likely also face impacts in the Last Mile delivery industry as roads become difficult to navigate and workers evacuate for safety.
Likewise, freight rail networks are also shifting engines, cars, and shipments out of the path of the storm as the industry continues “adapting to a world shaped by climate change,” the Association of American Railroads (AAR) said. Before floods arrive, railroads may relocate locomotives, elevate track infrastructure, and remove sensitive electronic equipment such as sensors, signals and switches. However, forceful water can move a bridge from its support beams or destabilize it by unearthing the supporting soil, so in certain conditions, railroads may park rail cars full of heavy materials — like rocks and ballast — on a bridge before a flood to weigh it down, AAR said.
The North American robotics market saw a decline in both units ordered (down 7.9% to 15,705 units) and revenue (down 6.8% to $982.83 million) during the first half of 2024 compared to the same period in 2023, as North American manufacturers faced ongoing economic headwinds, according to a report from the Association for Advancing Automation (A3).
“Rising inflation and borrowing costs have dampened spending on robotics, with many companies opting to delay major investments,” said Jeff Burnstein, president, A3. “Despite these challenges, the push for operational efficiency and workforce augmentation continues to drive demand for robotics in industries such as food and consumer goods and life sciences, among others. As companies navigate labor shortages and increased production costs, the role of automation is becoming ever more critical in maintaining global competitiveness.”
The downward trend was led by weakness in automotive manufacturing, which traditionally leads the charge in buying robots. In the first half of 2024, automotive OEMs ordered 4,159 units (up 14.4%) but generated revenue of $259.96 million (down 12.0%). The Automotive Components sector was even worse, orders 3,574 units (down 38.8%) for $191.93 million in revenue (down 27.3%). Declines also happened in the Semiconductor & Electronics/Photonics sector and the Plastics & Rubber sector.
On the positive side, Food & Consumer Goods companies ordered 1,173 units (up 85.6%) for $62.84 million in revenue (up 56.2%). This growth reflects the increasing reliance on robotics for efficiency in food processing and packaging as companies seek to address labor shortages and rising costs, A3 said. And the Life Sciences industry ordered 1,007 units (up 47.9%) for revenue of $47.29 million (up 86.7%) as it continued its reliance on robotics for efficiency and precision.
The warm waters of the Gulf of Mexico are brewing up another massive storm this week that is on track to smash into the western coast of Florida by Wednesday morning, bringing a consecutive round of storm surge and damaging winds to the storm-weary state.
Before reaching the U.S., Hurricane Milton will rake the northern coast of Mexico’s Yucatan Peninsula with dangerous weather. But hurricane watches are already in effect for parts of Florida, which could see heavy rainfall, flash and urban flooding, and moderate to major river floods, according to forecasts from the National Oceanic and Atmospheric Administration (NOAA).
As it revs its massive engines with fuel from the historically warm Gulf of Mexico, Hurricane Milton could possibly hit Tampa as a Category 5 storm, according to the FEWSION Project at Northern Arizona University, which tracks supply chains throughout the country.
With that much power, Milton could shut down the port and seriously disrupt the fuel supply into western and central Florida, which could then hinder recovery efforts. That’s because fuel supplies for much of Florida, especially central Florida, arrive from Texas and Louisiana through the Port of Tampa. That means that anyone who depends on generators or fuel for critical functions should plan for an extended period without access to fuel. And recovery crews and logisticians should consider bringing their own fuel when responding to the storm, FEWSION said.
One of those disaster recovery efforts will be led by nonprofit group the American Logistics Aid Network (ALAN), which is already mobilizing its forces for Hurricane Milton, even as it devotes other energy to the Hurricane Helene response. “In an ideal world we’d have plenty of time to focus all of our efforts on Hurricane Helene clean-up and recovery,” Kathy Fulton, ALAN’s Executive Director, said in a release. “But in the real world, major hurricanes don’t always wait for their turn. As a result, we are officially activating for Hurricane Milton.”
In the meantime, many weary residents of the region are thinking of moving to another part of the country instead of getting hit by vicious storms several times a year. Nearly one-third (32%) of U.S. residents aged 18-34 say they’re reconsidering where they want to move in the future after seeing or hearing about the damage caused by Hurricane Helene, according to a survey commissioned by real estate brokerage Redfin.
“Scores of Americans flocked to the Sun Belt during the pandemic because remote work allowed them to take advantage of the region’s relatively low cost of living. Some thought Appalachia was insulated from hurricane risk, not realizing that the area is prone to flooding and that hurricanes can sometimes cause flash flooding far away from the ocean,” Redfin Chief Economist Daryl Fairweather said in a release. “Americans are beginning to realize that nowhere is truly immune to the impacts of climate change, and we’re starting to see that impact where people want to live—even people who haven’t experienced a catastrophic weather event firsthand.”
The report is based on a commissioned survey conducted by Ipsos on Oct. 2-3, fielded to 1,005 U.S. adults. After making landfall in Florida in late September, Hurricane Helene wreaked havoc across Appalachia, becoming the deadliest storm to hit mainland America in almost two decades. In North Carolina, the death toll has surpassed 100 and the city of Asheville has been devastated.
Economic activity in the logistics industry expanded for the 10th straight month in September, reaching its highest reading in two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The LMI registered 58.6, up more than two points from August’s reading and its highest level since September 2022.
The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
The September data is proof the industry is “back on solid footing” according to the LMI researchers, who pointed to expanding inventory levels driven by a long-expected restocking among retailers gearing up for peak-season demand. That shift is also reflected in higher rates of both warehousing and transportation prices among retailers and other downstream firms—a signal that “retail supply chains are whirring back into motion” for peak.
“The fact that peak season is happening at all should be a bit of a relief for the logistics industry—and economy as a whole—since we have not really seen a traditional seasonal peak since 2021,” the researchers wrote. “… or possibly even 2019, if you don’t consider 2020 or 2021 to be ‘normal.’”
The East Coast dock worker strike earlier this week threatened to complicate that progress, according to LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. Those fears were eased Thursday following a tentative agreement between the union and port operators that would put workers at dozens of ports back on the job Friday.
“We will have normal peak season demand—our first normal seasonality year in the 2020s,” Rogers said in a separate interview, noting that the port of New York and New Jersey had its busiest month on record this past July. “Inventories are moving now, downstream. That, to me, is an encouraging sign.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).