U.S. Import Growth Expected to Ease As Tensions Rise in West Coast Ports

Analysts have projected that U.S. import growth is expected to ease this month after healthy highs in September and October. While the reduced import volume can help with the congestion issues plaguing the West Coast ports, not much relief is expected as tensions are swiftly building between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).

Negotiations have appeared to stall the last couple weeks as disruptions have occurred in the port complexes of Long Beach-Los Angeles (POLB-LA) and Seattle-Tacoma (SEA-TAC). A terminal has also been shut down in Sacramento yesterday. It is being reported today that teamsters in POLB-LA are protesting against two companies over unrelated wage and classification issues and have set picket lines, but it is still unclear whether the dockworkers will honor them.

Pressure from the public and trade groups has grown as a group of U.S. Senators from western states have sent a letter to the leaders of each group urging them to reach a consensus. This follows the pleas of a coalition of about 100 groups representing cargo interests, intermediaries and other organizations that do business at West Coast ports. Just last week, these groups asked President Obama to send a federal mediator to San Francisco to assist in the labor negotiations.

Despite the ongoing port issues, U.S. import volumes are expected to remain strong. Trade analyst predict that imports through the major U.S. gateways will total 1.4 million 20-foot container units this month, down from 1.59 million TEUs recorded in September and again in October.

November’s import volume would represent an increase of 3.9 percent compared to November 2013. Imports in September, the last month for which actual numbers are recorded, were up 10.9 percent, and October’s imports increased 11 percent from the same month last year. 2014 imports are expected to finish with an increase of 6.3 percent from 2013. Actual numbers show that imports in the first half of 2014 were up 7 percent over the same period last year.