Imports and Exports: Evaluating the Recent Labor Strike

Imports at major U.S. container ports are expected to stay elevated this month, despite last week’s labor strike that halted operations at East and Gulf Coast ports for three days.

According to the latest Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates, the strike is not anticipated to impact the upcoming holiday shopping season.

The International Longshoremen’s Association initiated the strike on October 1 after their previous 6-year Master Contract with the U.S. Maritime Alliance expired. However, the strike lasted only three days, ending after both parties reached a tentative agreement on a short-term contract extension until January 15.

“It was a huge relief for retailers, their customers and the nation’s economy that the strike was short lived,” said Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy. “It will take the affected ports a couple of weeks to recover, but we can rest assured that all ports across the country will be working hard to meet demand, and no impact on the holiday shopping season is expected.”

Despite the brief disruption, ports are expected to handle significant cargo volumes in the coming months.

U.S. ports covered by the Global Port Tracker handled 2.34 million Twenty-Foot Equivalent Units (TEUs) in August, marking a 19.3% increase year over year and the highest volume since May 2022. Final numbers from September are projected at 2.29 million TEU, up 12.9% year over year, while October is forecast at 2.12 million TEU, a 3.1% increase.

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Looking ahead, November and December are forecast to see modest year-over-year increases, potentially bringing the 2024 total to 24.9 million TEU, a 12.1% rise from 2023. These projections align with the NRF’s forecast of 2.5% to 3.5% growth in core retail sales for 2024.

Ben Hackett, Founder of Hackett Associates, noted that the recent surge in imports has been largely due to contingency planning: “The surge in imports over the past few months has clearly been the result of contingency imports by wholesalers, retailers and industrial companies in anticipation of the East and Gulf Coast port strike rather than a sudden increase in demand,” he said.

The resolution of the strike and the positive import projections suggest a stable outlook for the retail sector, particularly as the holiday shopping season approaches. However, industry leaders stress the importance of reaching a long-term agreement before the current extension expires in mid-January to avoid future disruptions.