Business Development

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Port Congestion: The Sports Fitness Industry Association Weighs In

8 Dec, 2014

By: Tracey Schelmetic

The global sports and fitness apparel industry is worth hundreds of billions of dollars globally, and the U.S. has an enormous stake in the market. Demand for U.S. brands in developing nations is propelling the market forward. In the U.S., however, the supply of sports and fitness-related goods has experienced significant backlogs due to congestion issues at western U.S. ports. Some of the issues have been blamed on work slowdowns by the union group the International Longshore and Warehouse Union (ILWU)

In response to the problems, the Sports & Fitness Industry Association (SFIA) has signed a petition to President Obama to take action to clear the blockages. The SFIA is a trade association that represents sports and fitness brands, suppliers, retailers and partners.

“Having these ports operating efficiently is crucial to our members’ businesses,” said Bill Sells, SFIA Vice President – Government & Public Affairs. “We encourage every one of our members and their employees to sign the petition asking the White House to engage in the process by having a federal mediator help negotiate a new collective bargaining agreement between the ILWU and PMA [Pacific Maritime Association] as a way to ease congestion at the ports.”

The backlog of work caused by the slowdown is having a “severe” impact on schedule reliability in the Oceania-North America trade lane which facilitates shipping between North America and Asia, according to the SFIA’s Web site. Reliability has reportedly dropped 26 percent in the last three months (to a record low of 68 percent in October) in the southbound route. Container delivery decreased 37.5 percent from July to October, reaching a record low of 50.5 percent, according to Sealntel Maritime Analysis. Reliability also dropped in the northbound direction, though less dramatically.

Last week, contract talks between west coast terminal operators and union Longshore members resumed in Seattle and other western cities. Many longshore workers have been working without a contact. According to the Seattle news Web site MyNorthwest, multiple groups have engaged in finger pointing over the last few months, with shippers blaming union members and unions have blamed a combination of factors, including a shortage of trailer chassis, larger ships that overwhelm the docks and crowded rail lines due to an increase in North American “fracking,” or natural gas drilling via hydraulic fracturing. After months of fruitless negotiations, the groups are reportedly engaging in contract talks once again.

Since the port congestion began in October, between 8 and 15 freighters are kept waiting outside the critical twin ports of Los Angeles and Long Beach. Many of these freighters contain holiday merchandise that is critical for sporting retailers to sell during the important end of the year sales period. 

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