Washington–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.
Shift to East Coast
“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% of U.S. retail container cargo in May, down from 62% 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% from April and 6.6% 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% from the same month last year, and July is forecast at 1.5 million TEU, up 4.3% from last year. August is forecast at 1.51 million TEU, up 1.6% from last year; September at 1.45 million TEU, up 1%; October at 1.49 million TEU, up 3.8%; and November at 1.39 million TEU, up 3.6%.
The first half of the year is expected to total 8.3 million TEU, up 6.7% over last year. The total for 2013 was 16.2 million TEU, up 2.3% from 2012’s 15.8 million TEU.
The import numbers come as NRF is forecasting 4.1% 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.
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