“Monthly port volumes are building slowly following the slow season but import container traffic is forecast to be quite weak through August due to the underlying weakness in demand in the US economy,” Global Insight Economist Paul Bingham said. “The covered ports are operating without congestion from the harbor to the gate, with late-winter weather problems resolved.”
With the West Coast labor contract negotiated in 2002 set to expire July 1, the International Longshore and Warehouse Union and the Pacific Maritime Association sat down March 17 to begin negotiations on a new contract.
A breakdown in talks in 2002 led to an employer lockout that shut down movement of all cargo at West Coast ports for 10 days and had rippling effects for several months afterward. Without a backup plan, many importers and exporters experienced marooned cargo and the situation proved costly, especially for those moving time-sensitive or perishable goods.
Despite those problems, “Those who follow West Coast labor relations believe things will not be so bad this time around,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Talks have begun earlier than usual and with the Panama Canal being expanded, more ships using the Suez Canal and East Coast ports being expanded, both labor and management realize this year that the dominance of West Coast ports is not guaranteed.”
“Contentious labor negotiations would hasten the move to the East Coast and would prove costly for those on both sides of the negotiating table,” Gold said. “Terminal operators don’t want to lose volume, and union negotiators don’t want to lose the jobs that go with that volume. This should provide a strong incentive for both sides to conclude a new contract before July.”
US ports surveyed handled 1.24 million Twenty-Foot-Equivalent Units (teu) of container traffic in February, the latest month for which actual numbers are available and traditionally the slowest month of the year. The number was unchanged from January but down 5.4 percent from February 2007 to make it the seventh month in a row to show a year-to-year decline. March was estimated at 1.29 million teu, up 1.1 percent from March 2007, an increase that would break the string of year-to-year decreases if the figures hold true when actual numbers come in. April is forecast at 1.34 million teu, up 1.7 percent from April 2007. May is forecast at 1.36 million teu, down 1 percent from May 2007, June at 1.38 million teu, down 4.9 percent from June 2007, and July at 1.43 million teu, down 1 percent from July 2007. August is forecast at 1.46 million teu, the same as August 2007.
All US ports covered by Port Tracker – Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast – are rated “low” for congestion, the same as last month.
