But Looming Strike Could Slow Supply Chain
A May, 2024, increase of 7.5% in goods passing through US ports over May of last year indicates confidence among large retailers, according to Global Port Tracker reports. Jonathan Gold, vice president for Supply Chain and Customs Policy with the National Retail Federation (NRF) said, “We’re experiencing the strongest surge in volume we’ve seen in two years, and that’s a good sign for what retailers expect in sales. Consumers can rest assured that retailers will be well-stocked and ready to meet demand as we head into the back-to-school and holiday seasons.”
Increased port traffic is a predictor of consumer spending, but a looming strike could slow the pace.
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U.S. ports covered by the report handled 2.08 million Twenty-Foot Equivalent Units (TEU) – one 20-foot container or its equivalent – in May, the latest month for which final numbers are available. That was up 3% from April and up 7.5% year-over-year, and was the highest number since 2.26 million TEU in August 2022.
Reports for June are not compiled yet, but Global Port Tracker projected volume of 2.1 million TEU, up 14.5% year-over-year. July is forecast at 2.21 million TEU, up 15.5% year-over-year.
All this bodes well for expected consumer demand through the end-of-year holiday shopping season.
A Fly in the Ointment?
Supply chain issues continue in some quarters, but in June contract negotiations broke down between the International Longshoremen’s Association and the U.S. Maritime Alliance. A letter to President Joe Biden from more than 150 groups including the US Chamber of Commerce and the National Association of Manufacturers, called on the administration to work to resume contract negotiation to ensure no disruption of port operations.
“With all these existing challenges, the last thing the supply chain, companies and employees — all of which rely on the movement of goods, both imports and exports, through our East Coast and Gulf Coast ports — need is a strike or other disruptions because of an ongoing labor negotiation,” the letter stated.
The current agreement, which covers about 45,000 dockworkers at facilities including six of the 10 busiest US ports, expires September 30.