Supply Chain

Supply Chain Headache at L.A. Port

Two-to-three week delays in moving cargo containers out of the port could cause problems for major retailers that are stocking up for the holidays.
Matthew HellerOctober 24, 2014
Supply Chain Headache at L.A. Port

The Los Angeles area is well-known for its gridlocked freeways. But it’s a different kind of congestion that is threatening timely delivery to retailers for the holiday season.

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The container port in Long Beach, Calif.

A shortage of trucking equipment known as chassis and possible labor disruptions are delaying shipping containers for up to three weeks at ​the Los Angeles/Long Beach port complex, ​the nation’s busiest, Reuters reports. Cargo containers typically take two to three days to move out of the port.

While retailers said they did not anticipate product shortages, inventory control systems are so finely calibrated that any delay can make it costlier for retailers to put merchandise on the shelves. Wal-Mart recently diverted 300 containers from L.A./Long Beach to Oakland, Calif., to avoid the congestion, a source told Reuters.

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Other affected retailers include JC Penney, Macy’s, Kohl’s and Nordstrom. “There will be a scramble to restock shelves this holiday season,” Mark Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders Association, told Reuters. “The delays are running into two to three weeks.”

The vast L.A./Long Beach complex handles 40% of U.S. container cargo, with trucks waiting in mile-long queues on busy days. Val Noronha, president of Digital Geographic Group, said the company’s GPS tracking data showed a third of trucks have been taking more than two hours to enter and leave the port, compared to about one fifth taking that long in June 2010.

According to Reuters, the delays are a result of the move by shipping lines, which struggled during the recession, to sell container trailers and other non-core assets to equipment leasing companies. “The change sent roughly 8,000 truckers that serve the port each day scrambling to find chassis,” Reuters noted.

The National Retail Federation said in a statement that protracted labor negotiations were also contributing to the congestion.

An apparel importer told Reuters that American Eagle, Ralph Lauren and Carter’s shipments from Bangladesh have been stuck for more than two weeks. “We simply don’t know when these shipments will move out,” the source said.

Source: Reuters Port squeeze threatens U.S. retailers’ holiday stocking plans

Image: biofriendly, via Wikimedia Commons, CC BY 2.0