Retailer container traffic to see uptick in July
Import cargo volume at the nation’s major retail container ports is expected to increase 1.6% in July compared with the same month last year, and modest year-over-year increases are expected through the holiday season shipping cycle, according to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates.
“Whether consumers are going to have the confidence to spend during the next few months depends on what happens with employment, but retailers are being cautiously optimistic,” said Jonathan Gold, NRF VP supply chain and customs policy. “Sales can fluctuate from month to month, but these import numbers show that retailers are still expecting this year to be better than last year.”
U.S. ports followed by Global Port Tracker handled 1.34 million Twenty-foot Equivalent Units in May, the latest month for which after-the-fact numbers are available. That was up 4.1% from April and 2.3% from May 2011. One TEU is one 20-foot cargo container or its equivalent.
June remained at an estimated 1.34 million TEU, the same as May but up 4.7% from June 2011. July is forecast at 1.38 million TEU, up 1.6% from last year; August at 1.44 million TEU, up 6.2%; September at 1.45 million TEU, up 6.8%; October at 1.47 million TEU, up 12.6% over lower-than-usual numbers last year; and November at 1.3 million TEU, up 2%.
The first half of 2012 totaled an estimated 7.5 million TEU, up 2.6% from the same period last year. The total for 2011 was 15.1 million TEU, up 0.6% from 2010. NRF projects 2012 retail sales will grow 3.4% to $2.53 trillion.
Numbers in this month’s report reflect the addition of Miami to the list of ports covered.
“Economists and commentators are talking the economy down,” Hackett Associates founder Ben Hackett said. “Despite the mixed signals, we remain optimistic that consumers will remain in the market.”
Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah and Miami on the East Coast, and Houston on the Gulf Coast.
Health care: What employers should do now
On June 28, 2012, by a narrow 5-4 decision, the Supreme Court of the United States upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA) on the grounds that the individual mandate penalty is a tax. Because the Constitution clearly gives Congress the ability to impose a tax, the Court ruled, all of the other questions surrounding the mandate are moot.
In writing for the majority in National Federation of Independent Business vs. Sebelius, Chief Justice John Roberts stated that, “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”
Moving forward: What to do now
The ruling is clearly not the end of the debate over health care reform, but rather only the first act. U.S. health costs are projected to be significantly higher than the rest of the developed world, while health outcomes in the U.S. trail other industrialized nations — often badly. Providing expanded coverage, increasing the health status of our citizens, and better controlling costs are all goals that, while addressed in the PPACA, have a long way to go.
The ruling sends a clear message — organizations need to review their plans and seize this opportunity to create better strategies around their health plans, both in design and employee communication.
For human resource professionals, the message here is very clear — move forward with implementing and complying with PPACA, since major portions of it take effect in 2014 (a mere 18 months away) and other provisions take effect later this year and in 2013. For example, many employers soon will be required to report the value of employer coverage on IRS Form W-2, and all employers must issue a summary of benefits and coverages. Employers who were waiting to begin planning on how to comply (or whether to even offer or continue to offer health coverage) need to begin performing quantitative and qualitative analyses on their plans. More importantly, they need to begin looking at their health plans as part of an overall HR strategy for their organizations.
Key steps employers need to take now to plan for 2014:
1. Determine the strategic implications of whether or not to offer a plan. Health benefits are just one part of an overall total rewards strategy. How does an organization’s having (or not having) health benefits impact other talent acquisition and talent management strategies?
2. Review the Supreme Court decision as to its impact on your organization.
3. If a plan is offered, perform a qualitative analysis on whether it makes sense to remain a grandfathered plan or become nongrandfathered by examining the seven PPACA provisions that apply only to nongrandfathered plans.
4. Perform a qualitative analysis to determine if existing plans meet qualifying eligibility and affordability standards. In order for employers to avoid potential penalties, ensure that any health plans offered meet both standards.
5. Determine the true organizational costs of either offering or not offering health coverage after 2013. For many organizations, this is not the “no-brainer” that it may first appear.
6. Perform a quantitative analysis to project the so-called “Cadillac tax” set to begin in 2018.
Gary B. Kushner, SPHR, CBP, is president and CEO of Kushner & Company. He is a frequent presenter at SHRM conferences, a former SHRM board member and a former chair of the HR Certification Institute who has testified in front of the U.S. Congress on benefits and health care issues.
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RILA warns of potentially devastating disruption
The Retail Industry Leaders Association (RILA) urged the International Longshoremen’s Association and the United States Maritime Alliance to reach a contract agreement well in advance of the Sept. 30 deadline in order to prevent a disruption to the flow of goods.
The ongoing labor negotiations affect 14 East and Gulf Coast ports, which together account for 95% of all containerized shipments to the Eastern seaboard.
“This potential disruption would be devastating to the retail industry as it would disrupt the flow of goods, resulting in lost sales and aggravated customers,” said RILA president Sandy Kennedy.
Ports play a critical role in the supply chain, and a potential disruption would be destructive to the retail industry’s ability to deliver their goods to consumers in a “just in time” fashion, according to RILA.
While a work stoppage would be the most harmful outcome, the letter reminded negotiators that if the parties fail to reach an agreement well in advance of the Sept. 30 deadline, retailers will be forced to redirect shipments in order to avoid an interruption in the flow of goods.
“[T]he absence of certainty over the outcome of the negotiations and facing the real possibility of a September stoppage, retailers have no choice but to continue planning for a shutdown. Indeed, some of our members advise that they are beginning to redirect their supply chains in order to allow adequate lead time to ensure that customer needs can continue to be met, regardless of whether the negotiations are successfully concluded by Sept. 30. Supply chain changes of this magnitude are not desirable to retailers because they take time both to implement and to reverse,” said Kennedy.
Home Depot CEO Frank Blake and Lowe’s CEO Robert Niblock are both board members of RILA.