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Home » Labor concerns driving rise in container imports, report says
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Labor concerns driving rise in container imports, report says

September 11, 2012
Mark B. Solomon
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Containerized imports entering the nation's major ports are expected to rise above seasonal norms in September as retailers scramble to get their cargoes into U.S. commerce ahead of a possible Oct. 1 work stoppage by organized labor at East and Gulf Coast ports, a retail trade group and a maritime consultancy said yesterday.

The monthly "Global Port Tracker" report, issued jointly by the National Retail Federation (NRF) and Washington-based consultancy Hackett Associates, projected that containerized traffic in September will increase by 8.5 percent from the same period in 2011. Traffic in October is expected to be even stronger year-over-year, with a projected gain of 11.7 percent. After that, the gains will diminish significantly as by then most seagoing freight would have already been brought into the United States for the holiday shopping period.

By contrast, import flows in September 2010 were virtually unchanged over the same period in 2009, and September 2011 activity was up only slightly from the same 2010 period.

Daniel Hackett, a partner at Hackett Associates, said there was no peak season in 2010, and in 2011, the peak season came earlier than normal as importers booked their freight to arrive in the U.S. in late summer.

THE LOOMING STRIKE
The unusually large gains in September and October are being driven in part by retailer concerns that a possible strike by the International Longshoremen's Association (ILA) at East and Gulf Coast ports will cause massive disruptions and keep freight locked out of the U.S. market at the worst possible time.

"Importers anticipating a strike placed orders early to ensure that their goods would arrive on time and are most likely switching deliveries for the East Coast to the West Coast instead," said Ben Hackett, founder of Hackett Associates, in a statement. As a result, Hackett said, August's numbers were also higher than normal. August volumes were up 4.4 percent over last year, according to the report.

Hackett said West Coast ports should continue to benefit through October as cargo is diverted.

Talks between the ILA and the United States Maritime Association, which represents waterfront management at the ports, are set to resume the week of Sept. 17 under the supervision of a federal mediator. Talks aimed at negotiating a new contract broke off abruptly in late August. The current contract expires Sept. 30.

In the meantime, retailers are weighing a number of contingency plans, most notably to shift imports to West Coast ports.

NRF is also optimistic that this fall's projected gains are the result of what is expected to be a stronger holiday season than in recent years. "Retailers are bringing in more merchandise for the holiday season this year. The question at some ports is whether longshoremen will be on the docks to unload it," said Jonathan Gold, NRF's vice president for supply chain and customs policy, in a statement.

Gold said he was confident that his members would have plans in place to ensure that goods reach store shelves without disruption.

Daniel Hackett of Hackett Associates said this year's September gains reflect a combination of unusual strike-related activity as well as a return to a historically normal and robust peak season. "[The 2012 peak] will be more like the peaks we saw in 2006 and 2007," he said.

The "Global Port Tracker" report covers imports flowing into 14 U.S. and Canadian ports. Traffic is measured in twenty-foot containers or their equivalent, known as TEUs.

Transportation Maritime & Ocean
KEYWORDS Hackett Associates National Retail Federation
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Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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