Expiration of West Coast Ports Contract Brings Surge in Imports
July 09, 2014
The Port of Los Angeles
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 Wednesday by the National Retail Federation and Hackett Associates, a maritime research and consulting business.
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, according to NRF.
“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 20,000 members of the International Longshore and Warehouse Union at 29 West Coast Ports expired on July 1. Dockworkers remain on the job as both sides continue to negotiate a new agreement, but are on a break in talks through July 11.
Retailers have a number of contingency plans in place, according to NRF, 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.
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.”