Retailers are not stocking up as much this summer in anticipation of the upcoming holidays, according to the National Retail Federation.
Import cargo volume at major container ports is expected to be mostly down through the summer but should see a significant uptick just before the holiday season, NRF says.
“The unusual patterns seen last year in the aftermath of the West Coast ports slowdown are continuing to make valid year-over-year comparisons difficult,” NRF Vice President Jonathan Gold observes.
“Retailers are balancing imports with existing inventories but consumers can expect to see plenty of merchandise on the shelves for both back-to-school and the holidays,” he adds.
Ports covered by the NRF Global Port Tracker handled 1.44 million TEUs in April, the latest month for after-the-fact numbers. This volume was up 9.1% from March but down 4.6% in April 2015.
May was estimated at 1.54 million TEU, down 4.2% from the same month last year. June is forecast to also be 1.54 million TEU, down 1.9% from last year; July at 1.62 million TEU, up 0.2%; August at 1.63 million TEU, down 3%; September at 1.57 million TEU, down 3.5%, and October at 1.61 million TEU, up 3.4%.
The first half of 2016 is seen totaling 8.9 million TEU, up 0.3% from the first half of 2015. Last year’s total volume was 18.2 million TEU, up 5.4% from 2014.
Ben Hackett founder of Hackett Associates, which produces the Port Tracker for NRF, says, “Inventories remain very high, pointing to an overstocked situation that will depress the volume of imports in the coming peak season. Unless inventories drop through further increased consumer spending, import growth will remain sparse.”
90% of Businesses Suffer Cyberattacks
A survey finds that 90% of businesses suffered at least one hacking incident in the last year, and 64% experienced more than six during the same period, up from 32% for the previous year.
The number of attacks increased 21% from 2015, according to the survey of business risk managers conducted in April by a unit of Munich Re.
“Hackers are even more relentless,” observes Eric Cernak, the compay’s cyber practice leader. “U.S. businesses are under constant assault.”
The cyber study shows risk managers worry about the safety and security of Internet of Things devices, with only 28% saying they are safe for business use. Despite these concerns, more than half 56% of the businesses implemented or plan to implement such devices.
“As businesses use IoT devices to improve productivity and efficiency, they must think about the security costs,” says Cernak. “Hackers are always looking for ways to access company business systems and connected devices provide additional infiltration points. It’s important to control security features on these devices and monitor employee use.”
Primary concerns about cyber technology include the loss of confidential information (44%), government intrusion (27%) and potential service/business interruption (17%).
When asked about the risk management services they have deployed to combat cyber risk, the risk managers point to encryption (44%, up from 25% in 2015); intrusion detection/penetration testing (28%, down from 32%) and employee education programs (12%, down from 25%).
For additional protection, 50% say their business has either purchased cyber insurance for the first time or increased its level of coverage over the previous year.
States Seek to End On-Call Scheduling
New York is the latest state to investigate on-call scheduling in an obvious attempt to intimidate employers into ending the practice.
On-call scheduling occurs when employees are required to call in to an employer a few hours before a shift to find out if they will work that day. Some policymakers believe the practice negatively impacts workers because those told not to come in receive no compensation for the day.
New York Attorney General Eric Schneiderman recently sent a second round of letters to employers
requesting information about on-call scheduling practices and expressing concern about the negative impact it may have on the lives of their employees.
Employers were asked to provide information about payroll records, sample schedules and any analysis or studies the companies may have performed about alternatives to on-call scheduling or the impact of the practice on the well-being and productivity of their employees.
Similar letters have been sent to employers by the attorneys general in California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota and Rhode Island.
In those cases, employers were told to provide policies, handbooks and documents regarding on-call scheduling, three to four samples of schedules including on-call shifts.
The letters also demand any computerized reports showing instances of on-call shifts assigned, and time and payroll records showing dates on which an employee was paid for a time period of fewer than the minimum hours required by state law (such as the four-hour minimum in New York).
In addition to the letter-writing campaign which began with letters to a handful of companies in April 2015, employers in California were hit with several private class action lawsuits last fall.
As the issue moves nationwide, employers making use of on-call scheduling should be prepared for scrutiny, whether from regulators or employees, warns the law firm of Manatt Phelps & Phillips.
No Relief for Teamsters’ Pension Woes
After rejection of a plan to save the Teamsters Central States Pension Fund that proposed massive benefit cuts, the fund has asked Congress to bail out its $11 billion estimated funding shortfall.
Presidential candidate Sen. Bernie Sanders (I-VT) and 19 other Democrat senators support a bill to do this and cover losses of other multi-employer pension plans.
The Treasury Department’s Special Master rejected the Central States request. He cited flawed investment assumptions (such as an overly optimistic 7.5% rate of return on investments); failure to distribute benefit cuts equally (some of which were as high as 60%); and notices sent to members he deemed were overly technical and difficult for the plan participants to comprehend (AA, 5-15-16, P. 3).
In recent months the Central States fund has been joined by four more plans seeking permission from the government for benefit cuts, including a Teamsters local in New Jersey.
But all of those are dwarfed by the Central States fund, which is estimated to cover a total of 403,000 retirees living in 37 states.
Its full name is the Central States, Southeast and Southwest Areas Pension Plan, and its coffers were filled originally by contributions from a multitude of trucking employers covered by the Teamsters National Master Freight Agreement labor contract.
Created in 1955, Central States became notorious during the tenure of Jimmy Hoffa as a plaything of organized crime, which used it to launder money and funnel investments to help build its gambling interests in Las Vegas.
Mob control of the fund culminated in the murder of a former plan administrator and friend of Hoffa named Allen Dorfman in 1983. The scandals surrounding mismanagement of the plan also were instrumental in the union being placed under court-managed supervision in 1989.
Economic deregulation of the trucking industry devastated the union and seriously weakened the plan. The number of trucking company employers contributing to it continued to shrink over the decades since decontrol dismantled the unionized trucking segment, leaving only a literal handful of companies contributing to the fund today.
Central States administrators estimate that the plan is short $11 billion required to meet the needs of current and future retirees. At present the fund is said to pay $3.46 in retirement benefits for each dollar it collects from employers
One major flaw is that Central States was created as a defined benefit plan as opposed to the more common defined contribution scheme.
The fund’s problems are so dire that they are believed to threaten the solvency of the Pension Benefit Guaranty Corporation, which was created to ensure the benefits of such pension plans and is already running a $52 billion deficit.
In order to protect the PBGC from going broke in just this sort of circumstance, Congress enacted the Multiemployer Pension Reform Act in 2014 that allows plans like Central States to slash benefits in order to regain financial stability.
However, it was the very mechanism created by this law that allowed a Treasury Department special master to reject the Central States’ recovery plan.
Without a bailout by the government, Central States retirees could see their benefits disappear entirely.
Although the benefit cuts were opposed by Teamsters General President James P. Hoffa, Jimmy Hoffa’s son, the plan’s insolvency could create difficulties for him if he chooses to run for re-election as the union’s chief later this year.
In addition, the cratering of Central States can be expected to seriously damage Teamsters’ organizing ability by making the union unattractive to the very workers it‘s trying to organize.