Hi Sergio,
CRNS is in the container sector which continiues to experience growth. CRNS utilization is in the 93% and it current stock valuation is still GARP.
IBD had a graph on import/export container volume but not in the electronic ed but it so happens I found the graph from the source cited in the paper....
piers.com
Ports, Rails, Retailers Plan Ahead To Avoid Import Logjam Again
BY LAURA MANDARO
INVESTOR'S BUSINESS DAILY
Published on Monday, August 15, 2005
Ahead of the key holiday shopping season, U.S. ports and the big retailers who rely on them say there's little sign of the congestion that caused container ships to clog West Coast harbors last fall.
That said, it's going to be another big year for sea-bound imports, and it won't be the last.
The question is whether the country's overstretched freight transportation system can handle the increasing volume of goods imported from abroad. Even as ports expand their work forces and get ready for supersized container ships, importers worry that other parts of the supply chain could buckle under ballooning loads.
"It's not just the ports' capacity to have bigger ships — it's labor, technology, trucking, road congestion, the shortage of drivers, the problem of railroads," said David Walker, executive vice president for logistics and allocations at Pier 1 Imports, (PIR) a home furnishings retailer. "We have to be more productive in moving more goods inland."
A smoothly functioning port and freight transportation system plays an integral, though usually low-profile, role in the U.S. economy as the country imports more and more goods from abroad.
Indeed, June trade figures out Friday show America's appetite for cheap imports is running strong.
The U.S. trade gap widened 6.1% to $58.8 billion in June as imports hit $165.6 billion, 2.1% higher than May and 11.1% from a year earlier, the Commerce Department said.
China has played a major role. U.S. imports from that nation surged to $21 billion in June, 24.3% higher than a year earlier. Chinese goods now comprise 15% of all goods imports.
Last year, a surprise jump in these imports caught the freight industry unprepared, leading to bottlenecks at the Los Angeles and Long Beach ports that handle 40% of all ocean-going imports into the U.S. This pileup delayed shipments to some retailers.
The culprit was a labor shortage. The Railroad Retirement Board offered early retirement to industry workers in 2002, spurring a staff exodus that the railroads hadn't replaced by 2004.
Meanwhile, shipping companies and terminal operators underestimated the import surge that would hit Southern California as manufacturers sourced more work to China. By the fall, the ports faced a shortage of longshore workers to handle what would turn out to be 24% higher volume than the prior year at Long Beach alone.
Without enough hands to move containers onto the rail cars, items bound for holiday sales sat at the ports — where longshore workers had to spend time rearranging the pileup rather than moving the containers out of the yard.
Ships that usually exited the Port of Long Beach within three days of entry found their stay lengthened to five days or even more. Some importers tried to shift their shipments to other ports, including those as far away as the East Coast.
Ports and retailers say they've taken steps to avoid a new backup.
Railroads and shipping companies have hired more staff. Union Pacific, (UNP) one of two big operators of the rails from Southern California ports, has added 1,925 rail workers and plans to double that by year-end.
The Pacific Maritime Association, which represents the West Coast shippers and terminal operators, has added 2,000 full-time and 7,000 part-time longshore jobs in Long Beach and Los Angeles since last summer. Other West Coast ports also have expanded staff.
Plus, the ports and retailers are changing some of their routines to speed up the sluggish parts of the transportation chain.
In July, the ports of Los Angeles and Long Beach launched an off-peak night shift that lets trucks pick up cargo until 3 a.m. By letting truckers work when traffic eases, they should be able to make three or four trips to warehouses further inland rather than two during the day shift, say the ports.
So far, efforts to avoid congestion seem to be working.
A "Port Tracker" launched two weeks ago by the National Retail Federation and research firm Global Insight found congestion levels were "low" for three-quarters of the country's major ports, including L.A./Long Beach and Oakland.
"We're not projecting the sort of problems we experienced last year," said Erik Autor, international trade counsel for the NRF.
Retailers Plan
The biggest relief from congestion at the major ports may come from retailers' defensive moves. They're ordering products earlier, setting shipments ahead of the September-October crunch months. And they're arranging for more of their carriers to ship through ports besides the main Southern California hub.
In 2003, Pier 1 began unloading more goods bound for distribution centers in Columbus, Ohio, and Chicago at Tacoma, Wash., rather than L.A./Long Beach. It's now building a distribution facility in Tacoma.
Diverted volume from Southern California is one reason Tacoma handled 20% more foreign volume during the first half of 2005 than the same period last year, says the Port.
"Because of the problems experienced last fall, some of the major shippers and steamship lines are looking not really to take volume away from Southern California, but to funnel a little more of their growth through alternative ports," said Doug Ljungren, the Port's business planning manager.
Ports along the nation's other two coasts have also picked up volume once bound through the big Southern California ports.
Georgia's Port of Savannah along the Gulf Coast says volume has increased 12% in the first half as it gains more Asian cargo volume.
Wal-Mart, (WMT) which bought $18 billion in Chinese goods last year, will import less through West Coast ports this year, said a spokeswoman.
Meanwhile, retailers seem to be spreading out shipments to non-peak months. The Port of Oakland, for instance, says container traffic leaped 17% in the first half of the year vs. the 6.5% gain for all of 2004.
"Most importers have stretched their peak season out to try to avoid congestion they experienced last year on the West Coast," said a spokeswoman for the port.
Beyond this year, companies that rely on overseas imports are bracing for more cracks in the overburdened system.
Labor is one issue. In 2002, container ships sat for days off West Coast ports after a 10-day strike by dockworkers. Negotiations ironed out those issues, but they could return. Meantime, low rates have made it hard to recruit enough truckers to haul goods from the ports.
Inadequate infrastructure is another looming problem. Importers say they're still waiting for additional rail track through much of inland America. Ports face barriers to building new terminals from nearby communities and environmental groups.
Ports also are scrambling to expand their harbors to handle the next generation of freighters — called super post-Panamax ships because they're too large to fit through the Panama Canal. The Port of Oakland is dredging the harbor to make way for these fully loaded ships.
The challenges have made importers start to look at vastly different alternatives — such as a Western route from China that would run through the Suez Canal to the Mediterranean and on to the East Coast.
"There is more talk going on about this subject (of logistics challenges) than I've heard before," said Pier 1's Walker. |
