Imagine preparing for the year-end shopping season only to find empty shelves - all because of a port workers' strike notice. This isn't alarmist speculation but a genuine risk currently facing American retailers. With labor negotiations at East and Gulf Coast ports at a standstill, merchants are taking proactive measures by shipping goods early, leading to what may become record-breaking import volumes in August.
Looming Strike Threat Forces Retailers to Act
The latest Port Tracker report from the National Retail Federation (NRF) and Hackett Associates reveals that stalled contract talks between the International Longshoremen's Association (ILA) and United States Maritime Alliance (USMX) could lead to work stoppages at major East and Gulf Coast ports. The affected ports include New York/New Jersey, Hampton Roads, Charleston, Savannah, Miami, Jacksonville, and Port Everglades.
The current contract expires September 30, and with negotiations broken down over key issues, the ILA has vowed to strike if no agreement is reached. The NRF continues urging both parties back to the bargaining table to prevent economic disruption.
"Retailers are extremely concerned about the potential for a strike at East and Gulf Coast ports given the stalled negotiations," said Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy. "Many have implemented contingency plans like early shipments and diversions to West Coast ports. We urge resolution before expiration - neither retailers nor the economy can withstand prolonged disruptions."
West Coast Ports Benefit From Import Surge
The preemptive shipping surge is dramatically increasing import volumes. Port Tracker forecasts August imports at 2.34 million TEU (twenty-foot equivalent units), a 19.2% year-over-year increase that would mark the highest monthly volume since May 2022's 2.4 million TEU.
Beyond early shipments, cargo diversions to West Coast ports have pushed their market share above 50% for the first time in over three years. "Importers continue building inventory while rerouting cargo westward as insurance against potential labor disruptions," noted Hackett Associates founder Ben Hackett.
Understanding Import Data's Retail Implications
While import volumes don't directly correlate with retail sales or employment figures - as they measure container quantity rather than value - they serve as a key indicator of retailer expectations. When anticipating sales growth, retailers typically increase imports to meet demand.
First-half 2024 imports totaled 12.1 million TEU, up 15% year-over-year, with June reaching 2.16 million TEU (17.7% increase). July is projected at 2.34 million TEU (22.1% growth). If projections hold, 2024's annual total would reach 24.9 million TEU - a 12.1% annual increase and one of America's highest yearly import volumes on record.
The NRF maintains its 2024 retail sales growth forecast (excluding autos, gas stations and restaurants) at 2.5%-3.5%.
Red Sea Crisis Compounds Supply Chain Pressures
Beyond port labor concerns, Red Sea shipping attacks present additional global supply chain challenges. Commercial vessel assaults have forced rerouting around Africa's Cape of Good Hope, increasing transit times/costs while causing equipment shortages and Asian port congestion.
"This compounds existing disruptions including Red Sea commercial vessel attacks," Gold explained. "Route diversions create equipment shortages and congestion at Asian ports while driving up shipping times and expenses."
Critical Timeline for Labor Negotiations
The East/Gulf Coast labor negotiations' outcome will significantly impact holiday season preparations. Successful resolution would ensure smooth holiday inventory flows, while strikes could trigger supply chain breakdowns, product shortages and inflationary pressures.
Below are Port Tracker's monthly import projections (TEU in millions):
• July: 2.34 (+22.1%)
• August: 2.34 (+19.2%)
• September: 2.16 (+6.5%)
• October: 2.09 (+1.7%)
• November: 1.98 (-4.4%)
• December: 1.94 (+3.5%)
American retailers now navigate multiple challenges simultaneously - potential port strikes, Red Sea shipping instability and persistent inflation. Maintaining supply chain resilience requires vigilant market monitoring, strategic flexibility, diversified sourcing and robust risk management to ensure product availability during peak seasons.