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Retail container traffic at acceptable levels despite the threat of an ILWU strike

WASHINGTON, DC – 07/16/07 – Cargo traffic at the nation's major retail container ports is moving smoothly and should hit a record high in August despite the threat of a short-term clerical workers' strike at the Ports of Los Angeles and Long Beach, according to National Retail Federation (NRF) and industry analyst Global Insight.

"Los Angeles and Long Beach are under some threat of an office clerical union strike in the near future that could disrupt the ports' operations if contract negotiations are not resolved," reads a recent analysis in the groups’ jointly-published Port Tracker report.

"With holidays already scheduled for three days in July, a shutdown due to a strike could cause problems for both ports. Aside from the situation at Los Angeles and Long Beach, the rest of the major retail container ports across the country are operating without congestion from harbor to gate,” the monthly publication said.

Rank-and-file members of International Longshore and Warehouse Union (ILWU) Local 63 and the Marine Clerks Association recently authorized a strike, but negotiations are continuing even though the union's contract expired June 30.

The monthly report recently upgraded the ports' congestion rating from low to moderate, because of the possible job action.

All other US ports covered by Port Tracker – Oakland, Tacoma and Seattle on the US West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the US East Coast, and Houston on the US Gulf Coast – are currently rated "low" for congestion, the same as last month.

"[Los Angeles and Long Beach] are the nation's two largest retail container ports, and retailers will be watching this situation very closely," said NRF Vice President and International Trade Counsel Erik Autor. "With the back-to-school season upon us and the holiday coming soon, retailers need to be prepared to handle any disruptions that might occur."

The ports surveyed nationwide handled 1.37 million Twenty-foot Equivalent Units (TEU) of container traffic in May, the most recent month for which actual numbers are available. That was down 0.2% from May 2006 but up 3.3% from April.

Volume continued up in June, which was estimated at 1.4 million TEU (up 0.1% from June 2006), and July is forecast at 1.48 million TEU (up 6.3% from July 2006).

Ports in the survey are expected to set a record high in August, which is forecast at 1.54 million TEU, up 3.4% from last August and easily breaking last October's record of 1.51 million TEU. Volume should drop to 1.51 million TEU in September but will still be up 1.4% from last September, the report said.

October, traditionally the busiest month of the year as retailers bring in merchandise for the holiday sales season, is forecast at 1.57 million TEU, a 3.9% increase from a year ago and a new record.

After the October peak, traffic should drop to 1.47 million TEU in November (up 4.1% from November 2006) and follow its historical pattern of slowing down for the winter.

Port Tracker, which is produced by the economic research, forecasting and analysis firm Global Insight for NRF, looks at inbound container volume, the availability of trucks and railroad cars to move cargo out of the ports, labor conditions and other factors that affect cargo movement and congestion.

The National Retail Federation is the world's largest retail trade association, with 1.6 million member retail establishments that comprise all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores, and grocery stores, as well as the industry's key trading partners of retail goods and services.

The group’s members generated 2006 sales of $4.7 trillion.

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