Unresolved East, Gulf Coast Port Labor Dispute, Proposed Tariffs Could Drive Import Volume Higher: NRF
Uncertainties over labor negotiations affecting U.S. East Coast and Gulf Coast ports, plus concerns over tariffs proposed by President-elect Donald Trump (see 2411060037), could result in a higher volume of U.S. imports in the coming weeks, the National Retail Federation said Nov. 8.
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“October’s strike lasted only three days but there’s the potential for a longer strike if a new labor contract is not reached after the contract extension runs out in mid-January,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a release. Gold was referring to the three-day strike that occurred as a result of the negotiations impasse between the International Longshoremen's Association and the United States Maritime Alliance over ILA's contract, which expired Sept. 30 (see 2410040038). Both sides said on Oct. 3 they reached an agreement over pay, but they have until January to negotiate over other issues, including potentially the use of automation at the ports.
“That has retailers spending extra to bring in cargo early or continue shifting it to the West Coast to avoid any potential disruptions, much like they did earlier this year. And we’re hearing that some merchants will also move up shipments to avoid the costly tariff increases expected after Donald Trump returns to the White House. Neither of these developments is good for retailers, their customers or the economy," Gold continued.
When factoring in the labor strike at the ports, NRF and its survey partner Hackett Associates estimated that October import volumes at major U.S. ports rose 3.7% year-over-year to 2.13 million twenty-foot equivalent units. The survey estimated November imports would total around 2.15 million TEUs, up 13.6% million TEUs year-over-year, while December volumes would total 1.99 million TEUs, up 6.1%.
September imports meanwhile were estimated at 2.29 million TEUs, down 1.3% from August but up 12.8% year-over-year.
The import volumes forecast comes on the heels of the association's release Nov. 4 of a report suggesting that the tariffs that Trump proposed during his re-election campaign could result in a loss of between $46 billion and $78 billion in spending power each year they are in effect. The report considered the impact of a universal 10% to 20% tariff on imports from all foreign countries and an additional 60% to 100% tariff on imports specifically from China on the following six consumer products categories: apparel, toys, furniture, household appliances, footwear and travel goods.