US retailers stock up for possible port strike

US – Retailers across the US are preparing for potential disruptions by ramping up cargo volumes ahead of a looming contract expiration and the threat of a strike at East and Gulf Coast ports.

According to the Global Port Tracker report from the US National Retail Federation (NRF) and Hackett Associates, monthly inbound cargo volumes at major container ports may reach near-record levels this month.

The contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance is set to expire on September 30.

Concerns about a possible strike have led retailers to take proactive measures. “Retailers are worried about a strike due to stalled contract talks,” said Jonathan Gold, NRF vice president for supply chain and customs policy.

“Many have adjusted by shipping earlier and moving cargo to West Coast ports. We hope both parties resolve the issue before the current contract ends because a prolonged strike would be damaging for both retailers and the economy.”

This heightened activity is compounded by ongoing disruptions, including recent attacks on commercial vessels in the Red Sea.

These attacks have led to vessel diversions, resulting in increased shipping times, higher costs, and congestion in Asian ports. “Importers are ramping up inventories and shifting cargo to the West Coast as a precaution,” noted Ben Hackett, founder of Hackett Associates.

“This shift has pushed the West Coast’s share of cargo to over 50% for the first time in more than three years.”

The NRF reports that negotiations between the ILA and the maritime alliance have stalled, with the ILA threatening to strike if a new contract is not agreed upon by the end of September. The NRF continues to urge both sides to return to negotiations to avoid further disruptions.

Rising freight rates have also motivated importers to act sooner, further fueling the surge in cargo volumes.

Despite these challenges, the NRF forecasts a steady growth in retail sales for 2024. The report predicts an increase of 2.5% to 3.5% in core retail sales, which excludes automobile dealers, gasoline stations, and restaurants. This growth is expected to reflect a resilient retail sector despite the current uncertainties.