Worries of a potential dockworker strike at the East Coast and Gulf Coast ports come Oct. 1 could result in a near-record surge in imports to close out the summer.
According to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates, inbound cargo volume across July and August is expected to total 2.34 million 20-foot equivalent units (TEU) per month.
This would represent the most cargo since the record 2.4 million TEU that entered the U.S. ports in May 2022, the report said. The potential July total marks a 22.1 percent jump from last year, while the August projections are up 19.2 percent year-over-year.
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Jonathan Gold, vice president for supply chain and customs policy, NRF, said retailers remain concerned about the strike possibility due to the stalling of the contract talks in June. Those talks reached a stalemate due to the implementation of an automated gate system at the Port of Mobile, which the International Longshoreman’s Association says violates its current union contract.
“Many retailers have taken precautions including earlier shipping and shifting cargo to West Coast ports. We hope to see both sides resolve this issue before the current contract expires because retailers and the economy cannot afford to see a prolonged strike,” Gold said. “This comes on top of ongoing disruption issues including the attacks on commercial vessels in the Red Sea. Vessel diversions have led to increased shipping times and costs and have led to equipment shortages and congestion in Asian ports.”
U.S. ports covered by Global Port Tracker handled 2.16 million TEU in June, the latest month for which final numbers are available. That’s a 3.6 percent increase from May and a 17.7 percent jump from year-ago numbers.
One of the ports included in the statistics, the Port of Long Beach, saw imports increase a whopping 53 percent during the month to nearly 420,000 TEU. The port’s chief, Mario Cordero, said that the gateway was recapturing market share in another indicator that more cargo has been moved out west ahead of the possible labor strike.
“Importers are continuing to grow their inventories and are shifting cargo to the West Coast as a precaution against potential labor disruptions,” Hackett Associates founder Ben Hackett said. “We calculate that the shift has pushed the West Coast share of cargo we track to above 50 percent for the first time in over three years.”
For the first half of 2024, the ports reeled in 12.1 million TEU of inbound cargo volume, up 15 percent over the six-month period to start 2023. The totals include estimates for the ports of New York & New Jersey and Miami, which have not reported TEU counts for June.
Year-over-year cargo growth is expected to subside by the fall, the Global Port Tracker numbers forecast. September’s cargo total is forecast at 2.16 million TEU, up 6.5 percent from the year prior. But October’s jump will come in at just 1.7 percent to at 2.09 million TEU. After most holiday season shipments have already entered the U.S., the TEU totals are predicted to ease up as well, with November at 1.98 million TEU, up 4.4 percent from the year-ago period, and December at 1.94 million TEU, up 3.5 percent.
Combined across 2024, those numbers would bring the year to 24.9 million TEU, up 12.1 percent from 2023.
As more cargo flows into the U.S., the NRF isn’t the only retail trade association that has been concerned about what comes of the negotiations between the ILA and the United States Maritime Alliance.
In a Wednesday press release, the Retail Industry Leaders Association joined the NRF in urging both sides to return to the table and restart negotiations.
“A strike along our East & Gulf Coast ports would present not only a significant logistical challenge for retail supply chains, but could endanger the U.S. economy, as well,” RILA said in a statement. “It’s unclear why, with weeks to go before the contract expiration, the ILA is now turning its attention to strike planning rather than returning to the negotiating table to work toward a resolution. This move ignores the enormous economic stakes that are currently at play.”
The ILA will present its final contract demands to its wage scale committee delegates on Sept. 4-5. The union reportedly wants a wage increase larger than the 32 percent that the International Longshore and Warehouse Union agreed on last summer when they agreed to a new six-year deal that prevented a West Coast port strike.