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“Retailers instituted costly contingency plans early on to ensure that holiday merchandise would be on the shelves or sitting in a warehouse ready to go,” said Jonathan Gold, NRF vice president for supply chain and customs policy. “However, we are still hearing from retailers experiencing delays at West Coast ports, and retailers are also looking ahead to the spring season. We believe it’s imperative for President Obama to encourage the parties to seek the help of a federal mediator to resolve the ongoing contract negotiations so serious solutions to address the ongoing issues can be discussed and the uncertainty that has plagued our nation’s busiest ports for months can finally be brought to an end.”
Import volume at U.S. ports covered by the Global Port Tracker report is expected to total 1.37 million containers this month as the holiday shipping cycle winds down. Imports set an all-time record of 1.59 million containers in September as retailers rushed to bring merchandise into the country ahead of any disruption on the docks.
The contract between the Pacific Maritime Association and the International Longshore and Warehouse Union expired on July 1, prompting concerns about potential disruptions that could affect holiday merchandise. The lack of a contract and other operational issues have led to crisis-level congestion at the ports, and NRF last month asked President Obama to engage with the parties and encourage the use of a federal mediator to help with negotiations. A federal mediator can only be used if the parties make the request. A federal mediator helped parties to East Coast labor negotiations achieve a new deal in 2012.
Ports covered by Global Port Tracker handled 1.56 million twenty-foot equivalent units in October, the latest month for which after-the-fact numbers are available. That was down 2 percent from September but up 8.5 percent from October 2013 as the economy continued to grow. One TEU is one 20-foot cargo container or its equivalent.
November was estimated at 1.41 million TEU, up 4.8 percent from last year, and December is forecast at 1.37 million TEU, up 3.8 percent.
Those numbers would bring 2014 to a total of 17.2 million TEU, an increase of 6.2 percent over 2013’s 16.2 million. Imports in 2012 totaled 15.8 million. The first half of 2014 totaled 8.3 million TEU, up 7 percent over last year.
January 2015 is forecast at 1.41 million TEU, up 2.5 percent from January 2014, February at 1.34 million TEU, up 8 percent from last year, March at 1.33 million TEU, up 2.2 percent, and April at 1.46 million TEU, up 2.1 percent.
The import numbers come as NRF is forecasting 4.1 percent holiday season sales growth and 3.6 percent growth for 2014 overall. Cargo volume does not correlate directly with sales but is a barometer of retailers’ expectations.
Hackett Associates founder Ben Hackett said issues on the West Coast have prompted some retailers and other shippers to import their cargo through East Coast ports instead.
“The question is whether cargo currently being diverted to the East Coast will shift back to the West Coast once congestion in Los Angeles/Long Beach ends or are we experiencing a longer-term shift?” Hackett said. “Time will tell.”
Source: National Retail Federation
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