Little Impact from Possible Strike on Overall Container Traffic

July 8, 2007  by in UnCategorized   

By Home Furnishings Business in on July 2007 Traffic at the nation’s major retail container ports is moving smoothly and should hit a record high in August despite the threat of a short-term clerical workers’ strike at the ports of Los Angeles and Long Beach, according to the monthly Port Tracker report released Thursday by the National Retail Federation and Global Insight.

“Los Angeles and Long Beach are under some threat of an office clerical union strike in the near future that could disrupt the ports’ operations if contract negotiations are not resolved,” Global Insight Economist Paul Bingham said. “With holidays already scheduled for three days in July, a shutdown due to a strike could cause problems for both ports. Aside from the situation at LA/Long Beach, the rest of the major retail container ports across the country are operating without congestion from harbor to gate.”

LA/Long Beach, though, is a major port of entry for furniture goods arriving from Asia, as well as other retail merchandise.

“These are the nation’s two largest retail container ports, and retailers will be watching this situation very closely,” NRF Vice President and International Trade Counsel Erik Autor said. “With the back-to-school season upon us and the holiday coming soon, retailers need to be prepared to handle any disruptions that might occur.”

Rank-and-file members of International Longshore and Warehouse Union Local 63, the Marine Clerks Association, recently authorized a strike, but negotiations were continuing even though the union’s contract expired June 30. Port Tracker has moved the ports’ congestion rating from low to moderate, because of the possible job action.

All other U.S. ports covered by Port Tracker--Oakland, Tacoma and Seattle on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast; and Houston on the Gulf Coast--are currently rated “low” for congestion, the same as last month.

Nationwide, the ports surveyed handled 1.37 million twenty-foot equivalent units (TEU) of container traffic in May, the most recent month for which actual numbers are available. That was down 0.2 percent from May 2006 but up 3.3 percent from this April. Volume continued up in June, which was estimated at 1.4 million TEU (up 0.1 percent from June 2006), and July is forecast at 1.48 million TEU (up 6.3 percent from July 2006).

Ports in the survey are expected to set a record high in August, which is forecast at 1.54 million TEU, up 3.4 percent from last August and easily breaking last October’s record of 1.51 million TEU. Volume should drop to 1.51 million TEU in September but will still be up 1.4 percent from last September. October, traditionally the busiest month of the year as retailers bring in merchandise for the holiday sales season, is forecast at 1.57 million TEU, a 3.9 percent increase from a year ago and a new record. After the October peak, traffic should drop to 1.47 million TEU in November (up 4.1 percent from November 2006) and follow its historical pattern of slowing down for the winter.