In the first half of 2010, container traffic at the Nation's leading seaports rebounded as U.S. production activities started to recover. During this period, U.S. container ports handled a total of 110 million metric tons of containerized cargo, 17 percent more than the 95 million metric tons they handled in the same period in 2009 (table 1).2 The increase in volume was due mainly to a continued upturn in international trade during the first two quarters of 2010. Even with this rise, the 110 million metric tons handled in early 2010 was down 8 percent compared to the 120 million metric tons handled in early 2008 (table 1).

Container traffic rose nationwide and nearly all of the leading U.S. container ports experienced increased throughput. Nine of the top 10 U.S. ports saw increases in containerized tonnage, ranging from 11 percent at Houston to 51 percent at Seattle (table 1). Among the top 20 U.S. container ports, Wilmington, NC, had the largest increase, at 55 percent. Only three of the leading ports saw declines in traffic—Tacoma (down 19 percent), Philadelphia (down 9 percent), and Portland, OR (down 6 percent). By comparison, 12 of the top 20 ports saw declines in 2010 compared with 2008. In the same period, Wilmington, NC, again had the largest growth, at 46 percent (table 1). Tacoma, WA, experienced the sharpest decline, of 36 percent.

Both U.S. containerized exports and imports rose during the first half of 2010, as U.S. businesses replenished low inventories and production activities increased (USDOC BEA 2010a and USFRB 2010a and 2010b). By the end of the second quarter of 2010, U.S. container ports had handled over 48 million tons of maritime exports for the 6 months, 17 percent more than the 41 million tons they handled the same period of 2009 (figure 1). They also handled 62 million metric tons of imports, a 16-percent increase over the 54 million metric tons handled in 2009. Nationally, during the second quarter of 2010 alone, the flow of inbound container cargo jumped 24 percent over the same period in 2009 (34 million metric tons compared with 27 million metric tons). Although container traffic was up in early 2010, container ports handled less tonnage compared with early 2008. Maritime container exports for the first half of 2010 were down 6 percent from 2008 while container imports were down 9 percent.

The growth in freight activity at U.S. container ports during 2010 followed a less robust experience in 2009, when the tonnage of container cargo handled at the Nation's ports fell by 10 percent compared to 2008. That decline can be attributed partly to the slowdown in economic production, adjustments in business inventory, rising unemployment, and weak consumer spending (Alessandria et al. 2010). For most of 2009, U.S. businesses trimmed inventories, manufacturing and construction activities slowed, and Americans cut back on household spending as the financial markets tightened consumer credit.

During 2009, the total weight of maritime freight handled by America's container ports fell at 15 of the Nation's top 20 ports (table 1). All the top 5 ports saw a decline in 2009 compared with 2008. Eight of the Nation's leading container ports experienced year-on-year drops of more than 10 percent (and ranging as high as 26 percent).

Measured by TEUs, U.S. total maritime container traffic at all U.S. ports in 2009 was estimated at 24.9 million TEUs, a 12-percent drop from the 28.3 million TEUs in 2008 (USDOT MARAD 2010a).3 During 2009, declines in container traffic at ports on the west coast and east coast averaged 12 percent; gulf coast ports declined by 5 percent. Oakland was the only port among the Nation's top 10 container ports that did not see a decline in its cargo throughput (figure 2). Its container throughput remained steady at about 1.4 million TEU's. The two largest declines were Charleston, SC, at 28 percent and Tacoma at 22 percent.

Containerized trade between the United States and the rest of the world fell in 2009 in the wake of both weak domestic consumer demand, which cut import levels, and the overall global economic slowdown, which cut foreign demand for U.S. exports. During late 2008 and early 2009, as the U.S. financial crisis lingered, Americans reduced spending on imported clothes, automobiles, and other consumer merchandise, such as toys and flat-panel televisions. In addition, as the domestic financial crisis deepened and the global recession widened, overseas trading partners' demand for U.S. goods started to tumble, further weakening the maritime container market. As a result, declines occurred in U.S. demand for maritime container transportation by ocean vessels, cargo-handling activity at the container ports, and the volume of intermodal freight moved to and from the ports by truck and rail.

The recent trends in maritime container traffic are similar to trends in overall U.S. international merchandise exports and imports transported by all modes of transportation since 2008. The trends also reflect changes in the national economy as a whole (figure 3 and figure 4).

According to the U.S. Department of Commerce, the trends in merchandise exports and imports in the first two quarters of 2010 were driven primarily by industrial supplies and materials; foods, feeds, and beverages; automotive vehicles, parts, and engines; and consumer goods (USDOC CB BEA 2010). When adjusted for inflation, the value of merchandise exports in the second quarter of 2010 rose 3 percent compared with the first quarter. The value of merchandise imports rose 9 percent (figure 3). Since mid-2009 there have been four straight quarters with positive quarter-on-quarter growth in merchandise exports and imports.

Trends in container shipping are directly related to patterns in overall international trade, which is a primary contributing factor in the Nation's economic growth. For example, real gross domestic product (GDP)—the output of goods and services produced by labor and property located in the United States—has hovered at approximately a 1 percent quarter-on-quarter increase since the second quarter of 2009. In the second quarter of 2010, real GDP rose by 1.7 percent. The upturn in real GDP primarily reflected positive contributions from rises in personal consumption expenditures, exports and imports, and Federal Government spending (USDOC BEA 2010b).

Growth in economic activity and rises in exports and imports generally result in increased demand for freight transportation services by all modes of transportation. Because most U.S. overseas merchandise trade (over 66 percent by value and 99 percent by weight) moves by ocean vessel (USDOC CB 2010), the Nation's container ports are immediately impacted by swings in economic activity.4 The effects of changes in production activity are not limited to seaports; they also affect other sectors of the freight transportation industry.

2 A metric ton—a standard measure used globally—is a unit of weight equal to 2,205 pounds or 1,000 kilograms. By comparison, a "short ton," used in the United States and Canada, is equal to 2,000 pounds or 907 kilograms. Thus 1 metric ton equals 1.1 short tons. Yet another measure, the "long" ton, is sometimes used in the United Kingdom. A long ton is equivalent to 2,240 pounds, or 1,016 kilograms.

3 The standard measure for counting containers is the 20-foot equivalent unit, or TEU. This measure is used as a common base to count containers of various lengths. A standard 40-foot container is 2 TEUs, and a 48-foot container equals 2.4 TEUs. This measure is also used to describe the capacities of containerships or ports.

4 As used here, overseas trade excludes U.S. merchandise trade with Canada and Mexico.