Mirroring the legendary reputation of terrible Los Angeles traffic, a bottleneck has caused a two-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 p.m.
"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 percent of imports to the United States. Other ports across the country are seeing delays but none quite this bad.
[Image source: Flexport]