Source: Journal of Commerce
November 10th 2015
Retailers anticipate a jolly November for U.S. ports, with the National Retail Federation predicting that containerized imports will increase 8.3 percent over November 2014. Furthermore, last-minute importers of holiday merchandise should experience little if any port congestion.
“Conditions aren’t perfect, but the ports are running reasonably well,” said Jonathan Gold, vice president for supply chain and customs policy at the NRF. “That’s a dramatic difference from this time last year, when the West Coast ports were experiencing slowdowns and congestion from labor negotiations,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. The NRF and Hackett Associates on Tuesday released its monthly Global Port Tracker, which tracks containerized imports at all major U.S. gateways.
November 2014 was one of the slowest months of the year on the West Coast, with containerized imports 12 percent lower than in the previous month, according to container volume numbers posted on the website of the Pacific Maritime Association. Therefore, November’s projection is benchmarked off of a weak November 2014, at least on the West Coast.
Retailers last year shipped their holiday merchandise earlier than usual due to the prolonged labor negotiations on the West Coast. “Retailers had instituted costly contingency plans, but were still worried about whether merchandise would be unloaded in time for the holidays,” Gold said.
Peak season 2015 is returning to more traditional patterns. West Coast imports spiked in August and remained strong in September, according to the PMA. Imports were also strong at East Coast ports. October import numbers for the West Coast and for U.S. ports as a whole are not yet out, although Global Port Tracker estimates that imports in October were up 4.5 percent year-over-year.
The projection of strong imports in November could indicate that shippers of higher-value merchandise for the holiday season have enough confidence in the international supply chain to bring those shipments into the country as late as possible. Also, logistics experts have been saying for several months that there was an inventory that had been taking up much of the available space at import warehouses this summer and fall.
Global Port Tracker projections for the next four months are for extreme volatility year-over-year because of the unusual events that occurred from late 2014 to early 2015. The International Longshore and Warehouse Union contract negotiations with the PMA generated ILWU work slowdowns that began in early November, and employer retaliation to slash costly night and weekend work, which began in early 2015. West Coast ports went into gridlock, with dozens of vessels forced to wait at anchor for days, and sometimes weeks, before they could be worked.
Therefore, Global Port Tracker projects that containerized imports at U.S. ports will increase 0.4 percent in December compared to December 2014. Imports are projected to surge in January, up 18.5 percent, and in February, up 17.9 percent, because those months were a disaster this year. Labor issues, West Coast port gridlock and congestion problems at East Coast ports due to a surge of cargo diverted from the West Coast crippled imports on both coasts.
According to the PMA, imports at West Coast ports plunged 29 percent in January 2015 and 21 percent in February, compared to the same months in 2014. However, March turned out to be one of the strongest months of 2015 because terminal operators were able to work many of the ships that had been sitting out at anchor the previous two months. Therefore, Global Port Tracker projects that imports in March 2016 will decline 21.9 percent from March 2015.
Global Port Tracker said that as each month’s actual import numbers are posted, its earlier projections appear to have been quite accurate. Ben Hackett, founder of Hackett Associates, notes that the earlier January-October 2015 forecast turned out to be within 1 percent of the actual numbers.
Imports this year are doing rather well given the various economic developments impacting the global supply chain. Actual U.S. imports for the first half of 2015 were up 6.5 percent from the first six months of 2014. Global Port Tracker projects imports in calendar year 2015 will increase 6.1 percent over 2014.