While the expected East and Gulf Coasts’ port strike came to fruition at the end of September and subsequently ended after roughly three days, that is not expected to dint the ongoing stretch of high levels of United States-bound imports, , according to the Port Tracker report, which was issued today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.
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; Jacksonville; 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 strike, which impacted 36 ports from Maine to Texas, began at 12:01 AM on October 1, following the expiration of the previous six-year deal between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), and ended after three days, when the parties reached a tentative agreement on a wage increase, with that agreement going through January 15.
“It was a huge relief for retailers, their customers and the nation’s economy that the strike was short lived,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “It will take the affected ports a couple of weeks to recover, but we can rest assured that all ports across the country will be working hard to meet demand, and no impact on the holiday shopping season is expected. The strike wasn’t without impacts – retailers who brought in cargo early or shifted delivery to the West Coast face added warehousing and transportation costs. But the priority now is for both parties to negotiate in good faith and reach a long-term contract before the short-term extension ends in mid-January. We don’t want to face a disruption like this all over again.”
For August, the most recent month for which data is available, Port Tracker reported that import volume, for the ports covered in the report, came in at 2.34 million Twenty-Foot Equivalent Units, or TEU (with the report noting that the Ports of New York/New Jersey and Miami not reporting final data at by the release of the report), marking a 0.9% gain over July and up 19.3% annually. This marks the highest-volume month since May 2022’s record-setting 2.4 million TEU.
Port Tracker issued projections for September and the subsequent months, including:
- September, at 2.29 million TEU, for a 12.9% annual increase;
- October, at 2.12 million TEU, for a 3.1% annual increase;
- November, at 1.91 million TEU, for a 0.9% annual increase;
- December, at 1.88 million TEU, for a 0.2% annual decrease, which would slot total 2024 volume at 24.9 million TEU, for a 12.1% annual gain;
- January at 1.98 million TEU, for a 0.8% annual increase; and
- February, at 1.74 million TEU, for an 11.2% annual decrease, due to fluctuations related to the timing of Lunar New Year shutdowns at Asian factories
Hackett Associates Founder Ben Hackett wrote in the report that amid what he called modest growth in consumer spending, the import gains seen in recent months were driven by contingency imports by wholesalers, retailers, and industrial companies, in advance of the East and Gulf Coast ports’ strike, as opposed to a sudden increase in demand.
“The strike has come and gone, but the response has been double pronged, with shipments brought forward earlier than needed while importers also shifted cargo to ports on the West Coast,” he wrote. “The latter has been particularly noticeable since May.”
As for the impact of the work stoppage on import levels and port throughput, he explained that the hope is for a final agreement between the ILA and USMX to be reached by mid-January. And he added that the question of whether the domestic transportation network can move goods from where they have been delivered on the West Coast to where they’re needed on the East Coast as well as positioning empties for their return trip remains.
“We may see some short-term terminal congestion on the West Coast as vessels enroute there with East Coast cargo arrive, but this is not expected to be an issue of significance as the supply chain adapts. East Coast delays should also be limited,” he observed. “The Port of Los Angeles is projecting an increased number of vessel arrivals in the week of October 13 to 19, with a 35% increase in containers over the previous week and a massive 71% year-over-year jump. The week’s volume would be only marginally lower than the peak posted in May 2021 during the supply chain crisis.”
