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From Home Furnishing Business

Retail Imports Set Records

November 11, 2014  by in Industry, Sourcing / Importing   

The report, produced by the National Retail Federation and Hackett Associates, indicated volume should slow down in November following the last two months' record levels as retailers rushed to bring merchandise into the country ahead of a possible shutdown of West Coast ports.

“Retailers have done all they can to stock their shelves and build up inventories in case the worst should happen,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “We believe it’s time for President Obama to send in a federal mediator and do what it takes to reach an agreement that will work to the benefit of not just labor and management but all the businesses and consumers who depend on these ports.”

Import volume at U.S. ports covered by the Global Port Tracker report is expected to total 1.4 million containers this month, down from 1.59 million each in September and October, a number that broke the previous monthly high of 1.52 million set in August. Cargo volume has been well above average each month since spring as retailers have imported merchandise early in case of any disruption on the docks.

The contract between the Pacific Maritime Association and the International Longshore and Warehouse Union expired on July 1, prompting concerns about potential disruptions that could affect holiday merchandise. The lack of a contract and other operational issues have led to crisis-level congestion at the ports in recent weeks, prompting concern of a shutdown. NRF and more than 100 other business groups last week asked President Obama to send a federal mediator to help with negotiations. 

The 1.59 million Twenty-Foot Equivalent Units handled in September, the latest month for which after-the-fact numbers are available, was up 5.2 percent from August and 10.9 percent from September 2013. One TEU is one 20-foot cargo container or its equivalent.

October was estimated at 1.59 million TEU, within about 3,000 containers of September’s level and up 11 percent from the same month last year. November’s forecast of 1.4 million TEU would be up 3.9 percent from last year, and December is forecast at 1.36 million TEU, up 3.3 percent.

Those numbers would bring 2014 to a total of 17.3 million TEU, an increase of 6.4 percent over 2013’s 16.2 million. Imports in 2012 totaled 15.8 million. The first half of 2014 totaled 8.3 million TEU, up 7 percent over last year.

January 2015 is forecast at 1.42 million TEU, up 3.1 percent from January 2014, February at 1.35 million TEU, up 8.4 percent from last year, and March at 1.33 million TEU, up 2.3 percent.

The import numbers come as NRF is forecasting 4.1 percent holiday season sales growth and 3.6 percent growth for 2014 overall. Cargo volume does not correlate directly with sales but is a barometer of retailers’ expectations.

“September was a bumper crop well above even our own expectations,” Hackett Associates Founder Ben Hackett said. “Despite all the delays, vessels do continue to berth and discharge their cargo.”

Last Thursday, a coalition of retailers, manufacturers and farmers and other supply chain stakeholders sent a letter to President Obama urging the government’s immediate involvement in contract negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union. Management and labor have held talks since May but have yet to approve a final agreement on a contract that expired July, which covers dockworkers at 29 West Coast ports.

While the two parties have said they would remain at the negotiating table until a new deal is struck, recent labor activities – most recently at the Port of Seattle and Port of Tacoma – have led to a noticeable uptick in rhetoric and tensions that is causing the nation’s importers and exporters anxiety and alarm.

“The sudden change in tone is alarming and suggests that a full shutdown of every West Coast port may be imminent,” the letter said. “The impact this would have on jobs, down-stream consumers, and the business operations of exporters, importers, retailers, transportation providers, manufacturers, and other stakeholders would be catastrophic.”

NRF and the National Association of Manufacturers issued an economic analysis in June that found a port shutdown would cost the economy approximately $2 billion a day.