Los Angeles – Import cargo volume at the nation’s major retail container ports is expected to continue to slow down this month as cargo congestion and other issues continue to impact port operations on the U.S. West Coast.
The volume slide is a result of “far-sighted retailers instituting costly contingency plans early on to ensure that holiday merchandise would be on the shelves or sitting in a warehouse ready to go,” according to National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold.
“However, we are still hearing from retailers experiencing delays at West Coast ports, and retailers are also looking ahead to the spring season,” he said, commenting on the most recent Global Port Tracker report released today by the NRF.
“We believe it’s imperative for President Obama to encourage the parties to seek the help of a federal mediator to resolve the ongoing contract negotiations so serious solutions to address the ongoing issues can be discussed and the uncertainty that has plagued our nation’s busiest ports for months can finally be brought to an end.”
A major transpacific shipping alliance – the G6 – has reacted to the congestion problem by suspending eastbound calls at the Port of Los Angeles for the next four sailings of its Asia-U.S. West Coast service, due to “ongoing congestion.”
The G6 is comprised of APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line and OOCL.
It’s also been reported that G6 will skip other calls at APL’s Global Gateway South terminal in Los Angeles in order to “remain fluid,” according to an APL customer advisory.
Carriers calling Los Angeles and other U.S. West Coast ports have been significantly impacted by chronic backlogs that have plagued the Los Angeles/Long Beach port complex over the past few months.
The congestion in Southern California is due to a combination of chronic issues plaguing both Los Angeles and the neighboring Port of Long Beach that include a shortage of the chassis need to move containers in and out of the ports; unrest amongst truckers required to meet what they feel are increasingly burdensome environmental regulations; and labor negotiations between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU) that have dragged on for months with, some feel, no end in sight.
The contract between the PMA and the ILWU expired on July 1, prompting ongoing concerns about the potential shift of cargo to ports on the U.S. East Coast.
The NRF report was researched by business consultancy Hackett Associates.
According to Hackett Associates President Ben Hackett, “The question is whether cargo currently being diverted to the East Coast will shift back to the West Coast once congestion in Los Angeles/Long Beach ends or are we experiencing a longer-term shift?” Hackett said. “Time will tell.”