Early US imports lessen risk from potential seaport strike, economist says
By Lisa Baertlein
LOS ANGELES, Aug 13 (Reuters) -U.S. retailers' early back-to-school, Halloween and Christmas holiday imports could lessen cargo delays and financial damage should workers at vital seaports such as New York and Houston strike in October, a trade economist said on Tuesday.
The International Longshoremen's Association represents 45,000 dockworkers at three dozen U.S. ports from Maine to Texas and handle half of the nation's ocean trade. The ILA and employers represented by United States Maritime Alliance (USMX) are at odds over issues ranging from automation to wages.
"Retailers are concerned by the possibility of a strike at ports on the East and Gulf coasts because contract talks have stalled," said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
Those seaports handle roughly half of U.S. container imports, and any strike or slowdowns would hit ahead of the U.S. presidential election.
The ILA said it has scheduled a meeting to prepare for a potential strike if a new agreement is not in place by Sept. 30. USMX said in a statement it is ready to return to bargaining.
Companies such as Walmart WMT.N, Target TGT.N, Home Depot HD.N and Amazon.com AMZN.O, started importing laptops, Halloween costumes and toys during the spring. Typically, such holiday-related imports land at U.S. ports between August and October.
In July, U.S. container freight imports climbed 14% year-over-year, according to S&P Global Market Intelligence. That marked the third-highest monthly level for U.S. container imports, according to supply-chain-software provider Descartes Systems Group.
Such planning has "absolutely" mitigated risk from a potential port strike, S&P Global economist Paul Bingham said.
The import acceleration also aims to avoid shipping disruptions, from Houthi rebel attacks on commercial vessels near the Red Sea, drought-related restrictions on the Panama Canal and elevated hurricane risks, S&P said. The ocean shipping industry handles 80% of global trade.
The chances of a strike are low, Bingham said.
"In an election year, political pressures will be extreme on both sides to negotiate a settlement," he said.
Should a short strike occur, the financial impact would be limited because shippers are accustomed to adjusting for risk, said Patrick Anderson, CEO of Michigan-based Anderson Economic Group.
"If you're relying on specific things that are on those ships, it will affect you. But for much of America, a brief shutdown won't affect them," Anderson said.
Reporting by Lisa Baertlein in Los Angeles; Editing by Rod Nickel
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
