According to Port Tracker, published by the DC-based NationalRetail Federation and Waltham, MA-based economic forecasting firmGlobal Insight, cargo volume at North America's major retailcontainer ports is now expected to decline 6.5% in 2008, asmerchants carefully manage inventories in response to the sloweconomy. Volume is projected to total 15.43 million20-Foot-Equivalent Units (TEUs) for the year, compared with 16.5million TEUs in '07. The estimate is down from 15.5 million TEUsprojected in September. The total would be the lowest since '05,when 15.4 million TEUs moved through the continent's ports.

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The report says container imports for August, the most recentmonth for which data is available, were up compared to July butdown 5.9% compared to a year ago. It projects an even bigger dropof 9.2% for September compared to September '07, followed byrespective declines of 4.3% for October, 6.9% for November, 2.1%for December, 1.6% for January and 5.9% for February.

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"This has clearly been a difficult year and we still have achallenging holiday season ahead of us," says Jonathan Gold, NRFvice president for supply chain and customs policy. "Retailers arebeing careful to import only as much merchandise as they think theycan sell."

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If there's a silver lining in the otherwise dismal report, it'sthat lower cargo volumes mean less port congestion and fewer railand trucking capacity constraints. Port Tracker ranks all NorthAmerican ports but Los Angeles-Long Beach as "low" for congestionover the next six months. Significantly, the Southern Californiaport complex is rated "medium" for congestion not because of higherimports but because of uncertainties surrounding the ports'clean-trucks program that took effect Oct. 1.

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The decline is not confined to North America. According to theAnnual Container Market Review and Forecast 2008/2009 fromLondon-based Drewry, every country and region of criticalimportance to the container industry has suffered a major loss ofconfidence. "There is no doubting the seriousness of this for thecontainer industry and the tone of this annual report is indeedgloomy," says report editor Neil Dekker. "The super-cycle of2002-2007 is now well and truly over."

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Drewry says declines in the container industry have been madeworse by a spate of new ship orders. Some 65 new ships in excess of8,000 TEUs will launch in the next two years. The report predictsthe anticipated excess in capacity will further depress shippingrates, which have already fallen due to the slow-down in trade. Onthe other hand, the report points out, reduced freight prices couldlead toincreased production, and consequently increased shipping,as retailers and manufacturers recognize an opportunity to bringproducts to market at lower prices.

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Dekker says no nation is immune to the downturn. Even thoughsome regions may still enjoy strong fundamentals, the economicturmoil in the US and Europe is creating so much unease thatshipping and container companies throughout the world are pullingback, at least temporarily. Nonetheless, he adds the report doesmention some positives, including strong growth on routes from Asiato the Mideast ,India, West Africa and the east coast of SouthAmerica, as well as US exports to north Europe, the Mediterraneanand Asia, which has reduced the uneconomic practice of sendingempty containers back to their point of origin.

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The decline is also not limited to ocean shipping. According toAirports Council International in Geneva, Switzerland, domestic airfreight continued to fall in August, dropping 19%. The drop wasdriven primarily mainly by North America and Africa, which sawshifts of -27% and -28%, respectively. International freight shrunkby a smaller 2.6%, led by North America at -8% and the Asia Pacificregion at -4.3%.

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