In all industry there are cycles tied to the quarter or quarters where the revenues tend to be higher for good reasons. The quarters tend to be related to both the school year and weather because it makes a great deal of sense, in the past the quarters were related to agriculture cycle. Given the economies changed, agriculture is less important to the economy, but we all look forward to fresh farm produce at the supermarket. In the classic case, retailers do better in the fall because of the back to school and holiday season. If you were in the retail industry, you need to think months in advance to have the promotions ready for the peak seasons.

In an article by Siddharth Cavale and Lisa Baertlein of Reuters, retailers look at the macro aspect of logistics. The retail industry needs labor peace at the ports and railroads, and they are reasonably happy, as they can spend greater time on the shop or website.

For the all the political slogans of Make America Great Again, most retailers are depended on imports from around the world. Container imports and freight rates surged in July, signaling an earlier than usual peak season for an ocean shipping industry that handles about 80% of global trade.

Jonathon Gold, the National Retail Federation (NRF) VP for supply chain and customs policy, said customers are shopping earlier each year and retailers do not want to be caught back-footed.

Part of the reason is a potential US port strike, which a vote will be held on October 1st. The seaports across the US from Maine to Texas are affected at the negotiations are held between the International Longshoremen’s Association and the US Maritime Alliance.

In the July US container imports registered the 3rd-highest monthly volume on record with 2.6 million 20-foot equivalent units (TEUs), UP 16.8% from a year earlier, in part due to record imports from China, according to supply chain software provider Descartes Systems Group.

The NRF is chair by the CEO of Walmart and includes CEOs of Target, Macy’s and Saks on its executive committee, said it expects a strong August for imports. Walmart is the nation’s largest container shipping importer.

In every market there is a spot rate to cue to go quicker and in the container the world, if there is a threat for a strike on the East Coast, the prices to from China to the west coast rose. The rate went up 144% between April and July but fell back 17% in July. Depending on the talks will depend on prices falling for shipping containers with things for consumers to buy.

Linking to dividend paying stocks, all companies hope for normal conditions to be present and for the average consumer they are. When normal conditions are present, it is entirely possible to make good margins which translates into profits which allows to pay dividends. Built into the margins is the possibility of higher costs when alternatives have to made. Often alternatives are linked to logistics and there are multiple methods to find alternatives, hopefully larger companies have contingency plans built in. For your investments, how do companies adjust to contingencies?

There are more questions than answers, till the next time – to raising questions.