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Expiration of West Coast Ports Contract Brings Surge in Imports

 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 today 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.

While the West Coast contract situation is driving the surge in early imports, Hackett Associates Founder Ben Hackett said the increases in volume also reflect an improving economy.

“The economy is on the upswing,” Hackett said. “There’s been a sharp drop in unemployment, consumer spending has seen solid growth over the last three months, and there’s a strong level of consumer confidence.”

Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the East Coast, and Houston on the Gulf Coast. The report is free to NRF retail members, and subscription information is available at www.nrf.com/PortTracker or by calling (202) 783-7971. Subscription information for non-members can be found at www.globalporttracker.com.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation.

Hackett Associates provides expert consulting, research and advisory services to the international maritime industry, government agencies and international institutions.

www.nrf.com                                     @NRFnews                          www.thisisretail.org

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