Labor disputes in U.S., Canada could disrupt supply chain ops

Labor disputes in U.S., Canada could disrupt supply chain ops 

While a tentative contract agreement has been reached at West Coast ports, that doesn’t mean supply chain disruptions are over.

Retailers are closely following labor disputes at ports in western Canada and a potential Teamsters strike against United Parcel Service.
 

In Canada, workers are on strike at two of the country’s busiest ports: the Port of Vancouver and the Port of Prince Rupert. The walkout started on July 1. 

Here at home, the Teamsters Union and UPS last week accused each other of abandoning labor negotiations which are aimed at averting what would be the largest strike in the U.S. since the 1950s. The current contract ends at midnight on July 31. Without a deal, 340,000 Teamsters are preparing to go on strike at the nation’s largest trucking company on August 1.

“The port strike affecting Vancouver and Prince Rupert shouldn’t have a major impact here but could affect some U.S. retailers whose merchandise comes in through Canada and could have a potential ripple effect at other ports,” said NRF VP for supply chain and customs Policy Jonathan Gold said.

However, the ability to move goods from U.S. ports to stores could be impacted if UPS and the Teamsters don’t resolve their differences before their contract expires.

“We urge all parties in both negotiations to get back to the table and continue efforts to reach a final deal without engaging in disruptive activity,” Gold said. “Seamless supply chains are critical for retailers as we head into the peak shipping season for the winter holidays.”

Import cargo volume at the nation’s major container ports is expected to climb toward an August peak this summer, according to the Global Port Tracker report released Friday by the NRF and Hackett Associates.  

U.S. ports covered by Global Port Tracker handled 1.93 million twenty-foot equivalent units – one 20-foot container or its equivalent – in May, the latest month for which final numbers are available. That was up 8.5% from April but down 19.3% year over year.

Canada’s Vancouver and Prince Rupert aren’t included in the totals and not all of their cargo comes to the United States. But the two ports handled over 185,000 TEU in May, which accounted for approximately 9% of combined U.S.-Canadian container imports at ports covered by the full Global Port Tracker report.

Hackett founder Ben Hackett noted that first-quarter gross domestic product growth was revised upward to 2%, consumer demand is stable, and consumers have continued to spend while retailers and wholesalers have reduced their inventories.    

“These numbers together point toward another quarter of economic growth, which should confirm that the prospect of a recession is looking less likely,” he said.
Ports have not yet reported June numbers, but Global Port Tracker projected the month at 1.86 million TEU, down 17.5% year over year. That would bring the first half of 2023 to 10.6 million TEU, down 22% from the first half of 2022.

July is forecast at 1.94 million TEU, down 11% year over year, and August is forecast at 2.03 million TEU, down 10.1% year over year but the first month since last October to reach 2 million TEU. 

September is forecast at 1.96 million TEU, down 3.4%; October at 1.97 million TEU, down 1.8%, and November at 1.88 million TEU, up 5.9% for the first year-over-year increase since June 2022.

Global Port Tracker has not yet forecast the full year. But the third quarter is expected to total 5.9 million TEU, down 8.3% from last year. The first nine months of the year should total 16.5 million TEU, down 17.6% year over year.

Imports for all of 2022 totaled 25.5 million TEU, down 1.2% from the annual record of 25.8 million TEU set in 2021.

Global Port Tracker, which is produced for NRF by Hackett Associates, provides historical data and forecasts for the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast, and Houston on the Gulf Coast.