The congestion at Los Angeles and Long Beach ports has been going on for at least two months, but no one expected it to last this long, and no one anticipates an immediate fix - gridlocked docks possibly threatens holiday season. By Deborah Belgum
For nearly two weeks now, Ram Kundani has been waiting to receive seven cargo containers filled with tops, sweaters and dresses shipped from Bangladesh, China and Indonesia to the ports of Los Angeles and Long Beach. But some 10 days after their arrival, the containers on
Oct. 21 were still stacked on container vessels as gridlocked docks made it difficult to unload the big metal boxes. “The problem is, once they are off the boats, who knows when we will get them,” he said, noting that after the goods are unloaded, they are difficult to extract from the docks because there are so many cargo containers stacked up, one behind the other. Kundani said his retail clients, who are department stores and discount stores across the country, have
been sympathetic because just about every apparel importer bringing goods through the West Coast ports is experiencing the same problem. But as the holiday shopping season approaches, retailers are getting nervous and will start to discount goods to clear them out before the season ends. The discounted price, called markdown money, chips away at the total price apparel manufacturers ultimately are paid for their goods. “The majority of my things were to be delivered by Sept. 30,” said Kundani, who has worked for nearly 40 years at Los
Angeles–based B. Boston & Associates, where he is now the vice president. He estimates he could lose at least $2 million or more. “By now the retailers should have these goods in their
warehouses because it takes a month to get them from the warehouse to the stores. This is the worst I have ever seen it.”
Holiday Season Threatened
Mirroring the legendary reputation of terrible Los Angeles traffic, a bottleneck has caused a 2-week delay at the twin ports of Los Angeles and Long Beach in LA county. The harbor traffic could create problems for retail outlets during the holiday shopping season. “This is really
a perfect storm,” Port of Los Angeles Executive Director Gene Seroka told the Los Angeles Times. The pre-holiday surge of cargo for retailers like Wal-Mart, JC Penney, Macy’s and Kohl’s has always been a busy time of year, but it’s made worse this year by the use of massive container ships. These larger vessels can be up to one-third larger than Los Angeles and Long Beach ports have the capacity to handle. The root of the problem, though, is likely due to
a shortage of trucking equipment. “We have a meltdown on the harbor,” said Robert Curry, president of California Cartage Co., a trucking firm serving both ports. “Every day it gets worse.” Over the last year, third-party leasing companies have taken over the management of trucking equipment for the Los Angeles and Long Beach ports. For decades before that, trailers were owned by the shipping lines.
The uneven management of the trailers is causing shortages in some terminals and mile-long congestion in others. Compounding the inefficiency and delay, truckers sometimes have to
make multiple trips before finally locating an available trailer. The leasing companies disagree with this assessment, and insist that the massive container ships and a shortage of truck drivers is to blame. As reported by Reuters, a statement by the National Retail Federation suggested that protracted labor negotiations were also contributing to the long delay. The International Longshore and Warehouse Union declined comment. Anonymous sources also told Reuters that cargo for JC Penney, Macy’s, Kohl’s and Nordstrom still had not cleared the Los Angeles ports after two weeks. Another source also cited two weeks for cargo delivered for American Eagle, Ralph Lauren and Carter’s. This could cause problem for Black Friday
sales, including Macy’s plans to open Thanksgiving day at 6 PM.
“There will be a scramble to restock shelves this holiday season,” said Mark Hirzel,
president of the Los Angeles Customs Brokers and Freight Forwarders Association. “The delays are running into two to three weeks.” The delays are expected to last until the middle of November, creating a risk that retailers may send their cargo to other ports. Wal-Mart has reportedly already diverted at least 300 shipments from Los Angeles to Oakland in San
Francisco Bay. The Los Angeles and Long Beach ports process 40% of imports to the United States. Other ports across the country are seeing delays but none quite this bad. Source: Inquisitr
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