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 The delays are affecting retailers including JC Penney Co <JCP.N>,
Macy's Inc <M.N>, Kohl's Corp <KSS.N> Nordstrom Inc <JWN.N>,
American Eagle <AEO.N>, Ralph Lauren <RL.N> and Carter's <CRI.N>,
according to three people with direct knowledge of the situation.
Retail giant Wal-mart Stores Inc <WMT.N>, recently diverted 300
shipment containers to Oakland to avoid the congestion, one person
said. Wal-Mart declined comment.
The problem stems from a shortage of trucking equipment, called
chassis, but the National Retail Federation in a statement said
protracted labor negotiations were an issue, too. The International
Longshore and Warehouse Union declined comment on whether talks were
having an effect.
Most retailers acknowledged the delays at the key ports for
shipments from Asia, but said they did not anticipate product
shortages during the holidays. Even so, any delay can derail a
finely calibrated just-in-time inventory control system, making it
costlier for retailers to put merchandise on the shelves.
"It's a domino effect," said Nate Herman, vice president of
international trade at the American Apparel and Footwear
Association. "When there is an interruption, things degenerate
quickly."
With major port contracts up for renewal this year, retailers
including Wal-Mart ordered early and prompted a surge of deliveries
in June and July, port statistics show. But significant volume still
arrived during the traditional August-October period that precedes
the November-January holiday shopping season.
"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."
Cargo containers typically take two to three days to move out of the
port.
IDLE CONTAINERS
A freight forwarder who spoke to Reuters on condition of anonymity
said holiday merchandise for retailers like JC Penney, Macy's,
Kohl's and Nordstrom that landed at the Los Angeles port two weeks
ago still has not cleared the port.
An apparel importer who declined to be named said American Eagle,
Ralph Lauren and Carter's shipments from Bangladesh have been stuck
for over two weeks. "We simply don't know when these shipments will
move out," the source said.
An American Eagle spokeswoman declined comment on the delays.
JC Penney and Macy's both said they did not anticipate significant
delay-related issues. A Nordstrom spokeswoman said the company was
contacting vendors for information.
Wal-Mart, Kohl's, Ralph Lauren and Carter's did not respond to
requests seeking comment.
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DISPUTE ABOUT CAUSES
Outside the gates of Los Angeles/Long Beach Seaport on busy days,
trucks stand in mile-long queues, even as stacks of unmoved
containers wait for pickup at a complex that handles 40 percent of
U.S. container cargo. The Port of New York and New Jersey is also
affected, but to a lesser extent.
Val Noronha, president of Digital Geographic Research Corp, said the
company's GPS tracking data showed a third of trucks took more than
two hours to enter and leave the port, compared to about one fifth
taking that long in June of 2010.
Geoffrey Hanna, vice president of textile importer Henry W. Peabody
& Co., said some truckers have refused to go to the ports because of
long wait times. It took his firm more than two weeks to get a
recent shipment out, Hanna said.
The disruptions stem from the move by shipping lines, which
struggled during the recession, to sell container trailers and other
non-core assets to equipment leasing companies, port sources and
outside experts said. The change sent roughly 8,000 truckers that
serve the port each day scrambling to find chassis.
The backlog of containers is creating extra work. Statistics from
the Pacific Maritime Association, which represents 29 ports along
the West Coast, show hours paid to terminal workers jumped 24
percent this September over the same month last year. Last month,
750,850 inbound containers arrived at the Los Angeles/Long Beach
complex, up almost 11 percent from a year ago, the port statistics
show.
Several retailers and importers are considering alternatives such as
Houston or East Coast ports, Hirzel of Los Angeles Customs Brokers
and Freight Forwarders Association said.
"It will cost more and take longer but they want certainty," he
said. "In this situation, there is value in certainty."
(Editing by David Greising and Tomasz Janowski)
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