While a tentative contract agreement has been reached at West Coast ports, retailers remain vigilant as labour disputes continue to develop at ports in western Canada, along with a potential strike by the Teamsters against United Parcel Service (UPS).

Last month, concerns rose by the National Retail Federation (NRF) and Hackett Associates, regarding ongoing disruptions and their potential impact on the upcoming holiday season.

The tentative agreement reached at West Coast ports last month brought relief, but supply chain disruptions are not entirely resolved, cautioned Jonathan Gold, NRF vice president for supply chain and customs policy.

Gold highlighted the ongoing port strike affecting Vancouver and Prince Rupert in Canada, stating that while it may not heavily impact the US, it could affect US retailers who rely on merchandise shipments through Canada. He also expressed concerns about the potential ripple effect on other ports.

He added: “The ability to move goods from US ports to stores could be impacted if UPS and the Teamsters don’t resolve their differences before their contract expires at the end of the month. We urge all parties in both negotiations to get back to the table and continue efforts to reach a final deal without engaging in disruptive activity. Seamless supply chains are critical for retailers as we head into the peak shipping season for the winter holidays.”

Ben Hackett, Founder of Hackett Associates, acknowledged the upward revision of first-quarter gross domestic product (GDP) growth to 2% and stable consumer demand. He noted that despite reductions in inventories by retailers and wholesalers, consumers have continued to spend. Hackett said: “These numbers together point toward another quarter of economic growth, which should confirm that the prospect of a recession is looking less likely.”

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Port statistics by Global Port Tracker

May US ports handled 1.93 million Twenty-Foot Equivalent Units (TEU), representing an 8.5% increase from April. However, there was a year-over-year decline of 19.3%.

June numbers from ports are yet to be reported but Global Port Tracker projects a year-over-year decrease of 17.5% for the month, totalling 1.86 million TEU. Consequently, the first half of 2023 is expected to reach 10.6 million TEU, reflecting a 22% decline compared to the same period in 2022.

The forecast for July is 1.94 million TEU, an 11% year-over-year decrease.

August will be 2.03 million TEU, a 10.1% year-over-year decline. Notably, August will be the first month to surpass 2 million TEU since October of the previous year.

The forecast for September is 1.96 million TEU, down 3.4%; October at 1.97 million TEU, down 1.8%.

November at 1.88 million TEU, representing a 5.9% year-over-year increase—the first since June 2022.

While the full-year forecast has not been released by Global Port Tracker, it is anticipated that the third quarter will reach a total of 5.9 million TEU, an 8.3% decline from the previous year.

The first nine months of 2023 are expected to account for 16.5 million TEU, reflecting a 17.6% year-over-year decrease. In comparison, imports for the entire year of 2022 totalled 25.5 million TEU, down 1.2% from the record set in 2021, which stood at 25.8 million TEU.

Although Canada’s Vancouver and Prince Rupert ports are not included in the aforementioned totals, their cargo handling numbers should be considered. In May alone, the two ports managed over 185,000 TEU, accounting for approximately 9% of combined US-Canadian container imports at ports covered by the comprehensive Global Port Tracker report.