Retailers Load Up on Holiday Inventory Amid Port Negotiations
A report released today by the National Retail Federation (NRF) says that the nation's major retail container ports are expected to see a record-breaking surge in cargo volume this October as retailers build up their inventories for the holiday shopping season.
"Retailers are working hard to make sure customers can find what they're looking for regardless of what happens at the ports," said Jonathan Gold, NRF's vice president for supply chain and customs policy, in a company press release. Gold is of course referring to the ongoing contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU), with threat of a strike a real concern. The PMA represents 29 ports along the West Coast; the ILWU represents approximately 20,000 dockworkers at those ports.
The monthly Global Port Tracker report estimates a total of 1.53 million containers this month, topping the 1.52 million monthly record set in August. It also reveals that cargo volume has been well above average each month since the spring to avoid any disruption on the docks. However, retailers should remain vigilant with their orders.
The contract between the ILWU and the PMA expired this past July, leaving room for concern about this year's holiday merchandise. It's no secret that contract negotiations have led to backups and congestions at retail ports. Just yesterday, the NRF sent a letter to Robert McEllrath, president of the ILWU, hoping to resolve contract negotiations in an orderly fashion.
"We urge the parties to quickly come to a conclusion on a new labor agreement as a means to resolve the ongoing congestion issues impacting the West Coast ports. At a minimum, we ask that the parties extend the expired contract through November in order to reinstate arbitration agreements, which are preventing many issues at the ports from being addressed," reads the letter.
These latest import numbers come on the heels of the NRF's forecast of a 4.1 percent holiday season growth.
What are your thoughts on the ongoing negotiations? Do you think it will affect retailers’ holiday sales? Has it already affected your business? Let us know in the comments section below.