Crisis averted, supply chains rebound in December as 2013 trouble looms

Cargo volumes at U.S. ports are forecast to increase 3.9% this month following a 5.6% decline in November. That’s the good news, but now retailers and suppliers have to worry about the possibility of a strike at East coast ports.

The strike by workers at the ports of Los Angeles and Long Beach negatively affected container volumes in November, but resolution of the strike after eight days meant disruption in December was limited to just two days, according to the monthly Global Port Tracker report compiled by the National Retail Federation and Hackett Associates

"After a strong kickoff on Black Friday and Cyber Monday, the holiday season is looking good and these numbers reflect that," said Jonathan Gold, NRF vp for supply chain and customs policy. "Nonetheless, we narrowly avoided what could have been a long-term disruption with the strike in Los Angeles and Long Beach and don’t want to run that risk on the East Coast and Gulf Coast. NRF is continuing to urge labor, management and lawmakers to do whatever is necessary to keep our nation’s ports running smoothly," he said in reference to the possible disruptions at East coast ports if agreements aren’t reached with organized labor prior to the December 29 expiration of a contract extension.

U.S. ports followed by Global Port Tracker handled 1.22 million twenty-foot equivalent units (TEU) in November, down from 1.39 TEUs in October. A TEU is one 20 foot cargo container or its equivalent. The November figures was 5.6% below the same month the prior year, but the December forecast for 1.27 million TEUs will see traffic rebound 3.9%.

Looking ahead, forecasted volume of 1.31 TEUs in January would represent a 2% increase followed by February at 1.15 million TEUs, up 5.9%, March at 1.27 million TEUs, up 2% and April at 1.35 million TEUs, up 3.2%.

However, those forecasts could be in jeopardy if labor agreements are not reached due to differences with the situation that occurred on the West coast.

"While the strike led to some diversion of cargo to Oakland and ports further afield, we believe much of the cargo destined for LA/Long Beach will simply arrive at the port later as vessels adjust their rotations," said Hackett Associates founder Ben Hackett. "As we look ahead into the coming months of 2013, the main threat to cargo flows through the ports would be a strike on East Coast and Gulf Coast. There is little option for diversion."

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