Port Tracker reports solid volumes in time for holiday shopping season

Even with the myriad congestion-related challenges at United States West Coast ports, the most recent edition of the Port Tracker report from the National Retail Federation (NRF) and Hackett Associates observed that most holiday-related retail import cargo made it to the country in time for the holiday shopping season, with volumes expected to slow down in December as 2014 winds down.

NRF Vice President for Supply Chain and Customs Policy Jonathan Gold explained in a statement that costly contingency plans implemented by retailers focused on making sure holiday merchandise was on shelves in time were executed this year. But that does not mean things are in the clear either.

“However, we are still hearing from retailers experiencing delays at West Coast ports, and retailers are also looking ahead to the spring season,” said Gold. “We believe it’s imperative for President Obama to encourage the parties [the Pacific Maritime Association and the International Longshore and Warehouse Union] 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.”

In early November, the NRF and more than 100 other organizations penned a letter to President Obama, expressing their concern about the ongoing interruptions at West Coast port terminal operations and asking for help to ensure the situation does not escalate to a complete shutdown of West Coast ports. The labor contract between the parties expired on July 1 and in recent weeks relations have grown acrimonious. But as reported in LM, yesterday, there may be some positive developments forthcoming at the negotiating table.

ILWU said the PMA “dishonestly” accuses the union of breaking a spoken agreement that port operations would continue under the auspices of a temporary contract extension.
According to ILWU spokesman Craig Merrilees, the union has bargained in good faith despite “pressure tactics” imposed by the PMA over the past six months. These tactics include the shifting of ocean container chassis away from union crews, and refusing to bargain a training program for longshore workers as terminals become more mechanized.

As previously reported, heavy September and October volumes were spurred on by various factors, including: a combination of increasing congestion at ports, the lack of a new labor contract between the PMA and the ILWU impacting West Coast port operations, and improving consumer confidence aligned and subsequently resulted in strong volumes as retailers endeavored to make sure they were prepared inventory-wise for the holiday shopping season.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and Fort Lauderdale, Fla.-based Port Everglades. Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

The Port Tracker report said that for October, the most recent month for which data is available, reached 1.56 million TEU (Twenty-Foot Equivalent Units, which was 2 percent below September and 8.5 percent higher than October 2013.

The report estimated November volumes to come in at 1.41 million TEU (Twenty-Foot Equivalent Units), which would be up 4.8 percent annually, while December is pegged at 1.37 million for a 3.8 percent annual increase. January and February are estimated to hit 1.41 million TEU and 1.34 million TEU for annual gains of 2.5 percent and 8 percent, respectively.

Total 2014 volumes are projected to reach 17.2 million TEU for a 6.2 percent annual increase, while the first half of the year was up 7 percent annually at 8.3 million TEU.

In October, the NRF said it expects 2014 holiday retail sales (for the months of November and December) to increase 4.1 percent, with all of 2014 to be up 3.6 percent.

Hackett Associates Founder Ben Hackett said that East Coast ports have become an option for shippers to move more cargo through, due to the ongoing issues at West Coast ports. But he added that it is too soon to tell if this is the beginning of a longer-term shift to East Coast ports.