Imports Reach Normal Levels after Port Contract Ratified
According to the latest Global Port Tracker report released yesterday by the National Retail Federation (NRF), import cargo volume at the nation’s major retail container ports has returned to normal levels following ratification of a new West Coast labor agreement.
“Despite some lingering labor issues, the volume of cargo and the rate of growth have both largely settled down,” says NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “There are still congestion issues to be dealt with but we’re hoping to see reasonably normal back-to-school and holiday seasons this year now that the tensions of contract negotiations are behind us.”
The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) both voted in May to ratify a new five-year labor contract agreed to in February. The lack of an agreement and chronic operational and infrastructural issues led to crisis-level congestion at 29 U.S. West Coast ports after the previous agreement expired last July.
EAST COAST PORTS PROJECT GROWTH, WEST COAST ASSUMES VOLATILITY BETWEEN PORTS
Ports covered by Global Port Tracker handled 1.52 million TEUs (Twenty-Foot Equivalent Units or 20-foot-long cargo containers) in April, the latest month for which after-the-fact numbers are available. That was down 12.4 percent from March, when numbers were driven up by a surge of backlogged cargo after the West Coast labor dispute ended, but up 6.1 percent from April 2014.
The first half of 2015 is forecast at 8.8 million TEU, an increase of 5.4 percent over the same period last year.
“A stubbornly high inventory-to-sales ratio after last year’s rush to bring in adequate stocks of merchandise will couple with other economic factors to affect cargo volumes through the summer,” says Ben Hackett of transportation consultancy Hackett Associates.
“The West Coast recovery remains sluggish and the East Coast is not managing to hold on to the growth levels it has experienced over the past few months,” adds Hackett.
“June is going to be a mixed month for the West Coast with volatility between the ports, but July and August are projected to see growth across the board,” he says. “On the East Coast, we are projecting growth for most ports.”