NRF: Imports Rising As West Coast Ports Work On Backlog

Import cargo volume at the nation’s major retail container ports is expected to rise an unusually high 16.9% this month over the same time last year as West Coast ports begin to dig out from a backlog of cargo that built up during the just-concluded contract negotiations with dockworkers, according to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates.

“The contract talks are over, but the tentative agreement still has to be ratified and it’s going to take months to get back to normal on the West Coast,” said Jonathan Gold, NRF vp/supply chain and customs policy. “Retailers’ immediate priority is to make sure spring merchandise reaches store shelves in time.”

Ports covered by Global Port Tracker handled 1.24 million Twenty-Foot Equivalent Units (TEU) in January, the latest month for which after-the-fact numbers are available. That was down 13.4% from December following the end of the holiday season and down 9.5% from January 2014. One TEU is one 20-foot-long cargo container or its equivalent.

February was estimated at 1.27 million TEU, up 2.3% from 2014. March is forecast at 1.52 million TEU as spring merchandise arrives, up 16.9% from last year. The March number is high both because of the backlog of ships at anchor waiting to be unloaded and because the annual Lunar New Year shutdown of Chinese factories was later this year, delaying some February cargo into March, according to Global Port Tracker.

April is forecast at 1.51 million TEU, up 5.2%; May at 1.57 million TEU, up 6.1%; June also at 1.57 million TEU, up 6%, and July at 1.6 million TEU, up 6.7%.

Overall, the first half of 2015 is forecast at 8.7 million TEU, an increase of 4.5% over the same period last year.

Congestion at West Coast ports has prompted many importers to shift their cargo elsewhere, prompting speculation on how long the shift might last. West Coast ports handled 55% of cargo this January, down from 64% during the same month in 2014, while East Coast ports handled 45%, up from 36%.

“Importers and exporters are reviewing their supply chain plans for the future, and not necessarily in favor of the West Coast,” Hackett Associates founder Ben Hackett said. “Looking on the practical side, a number of factors favor a return to the West Coast.”

Hackett said sending ships from Asia to the East Coast is more expensive than the West Coast, takes longer, and results in higher expenses to move the cargo to Midwest distribution centers by rail. In addition, importers have significant investments in West Coast distribution centers that would not easily be abandoned, noted Hackett.