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West coast ports expiring contract brings surge in imports
10
Jul '14
With West Coast longshoremen still negotiating a new contract, retailers are bringing holiday merchandise into the country at record levels to protect against potential supply chain disruptions, according to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates.
 
Import volume at major U.S. container ports is expected to total 1.5 million containers this month. That’s the highest monthly volume in at least five years and follows a trend of unusually high import levels that began this spring as retailers worked to import merchandise ahead of any potential problems.
 
“We’re still hoping to get through this without any significant disruptions but retailers aren’t taking any chances,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Retailers have been bringing merchandise in early for months now and will do what it takes to make sure shelves are stocked for their customers regardless of what happens during the negotiations.”
 
The contract between the Pacific Maritime Association and the International Longshore and Warehouse Union expired on July 1. Dockworkers remain on the job as both sides continue to negotiate a new agreement, and NRF has urged both labor and management to avoid any disruptions that could affect the flow of back-to-school or holiday merchandise.
 
Retailers have a number of contingency plans in place, and Global Port Tracker numbers show that some importers have begun shifting cargo to East Coast ports: West Coast ports handled 59 percent of U.S. retail container cargo in May, down from 62 percent in January.
 
U.S. ports followed by Global Port Tracker handled 1.48 million Twenty-Foot Equivalent Units in May, the latest month for which after-the-fact numbers are available. That was up 3.7 percent from April and 6.6 percent from May 2013. One TEU is one 20-foot cargo container or its equivalent.
 
June was estimated at 1.46 million TEU, up 7.6 percent from the same month last year, and July is forecast at 1.5 million TEU, up 4.3 percent from last year. August is forecast at 1.51 million TEU, up 1.6 percent from last year; September at 1.45 million TEU, up 1 percent; October at 1.49 million TEU, up 3.8 percent; and November at 1.39 million TEU, up 3.6 percent.
 
The first half of the year is expected to total 8.3 million TEU, up 6.7 percent over last year. The total for 2013 was 16.2 million TEU, up 2.3 percent from 2012’s 15.8 million TEU.
 
The import numbers come as NRF is forecasting 4.1 percent sales growth in 2014. Cargo volume does not correlate directly with sales but is a barometer of retailers’ expectations.

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