Another Looming Port Strike Will Probably Cause Imports To Spike This Month

Dockworkers at East Coast and Gulf Coast ports are threatening to go on strike again, which is making retailers very, very nervous.

So much so that they've started stocking up on inventory.

The strike could cause 14 ports between Maine and Texas to shut down, which is where 15,000 dockworkers handle 40% of America's ocean cargo.

“We have seen a rise in the level of the retail inventory-to-sales ratio,” Hackett Associates Founder Ben Hackett said. “This may be a reflection of importers stocking up ahead of the East Coast/Gulf coast port strike that was expected, though the run-up came well ahead of that.”

This could cause imports to spike by 2.3% in January, said J. Craig Sherman in a report for the National Retail Federation.

Before talks between the International Longshoremen’s Association (ILA) and the management got really heated, imports were actually down. Dockworkers handled 2.8% less merchandise in November 2012 than they had in the previous, according to the report.

But in December, when it started to look like the union might actually go on strike, that number went up, and December imports were up 6.5% from the previous year.

The union and management are scheduled to meet next week under the supervision of federal mediators, but the ILA walked away from local talks affecting the Ports of New York and New Jersey earlier this week.

This is a burden that America's economy just can't afford, said Jonathan Gold, NRF's Vice President for Supply Chain and Customs Policy.