Port Congestion Leads to Overflow Docking in Orange County
For the first time in two years, container ships are being parked off the coast of Huntington Beach, Calif., in Orange County because of congestion at the Port of Long Beach and Port of Los Angeles.
“For the past two weeks, we have been anchoring ships off of Huntington Beach,” confirmed Manny Aschemeyer, executive director of the Marine Exchange of Southern California, which monitors the comings and goings of ships at both ports. “We’re averaging two or three ships a day there.”
Anchoring ships off the Huntington Beach coast is a bit like the canary in the coal mine. It is an indication that traffic at the nation’s largest port complex, where ships have been backlogged since late June, is reaching a critical stage.
The Orange County coastal area was last used as an aquatic parking lot two years ago when a contract dispute between the International Longshore and Warehouse Union and the Pacific Maritime Union, the bargaining arm for the steamship lines, led to 10,500 ILWU members being locked out of their jobs at 29 West Coast ports from late September through mid-October, the prime Holiday shipping season.
At the lockout’s worst point, there were 120 ships in port with 70 of those at anchor. About 20 were anchored off the Huntington Beach coast at that time.
On an average day, there are 43 ships at both ports and about four at anchor. Currently, there are about 80 ships in port and anywhere from 30 to 35 at anchor at any time. It’s expected to get worse. “The number of ships arriving for October looks pretty significant,” Aschemeyer said.
Ships that normally take two to three days to unload their containers are now taking seven to nine days because of shortages of truckers, dockworkers and railroad personnel.
Since late June, scores of vessels have opted to bypass the Los Angeles/ Long Beach port complex and dock in Oakland, Calif., or at other ports. Last week, three ships bypassed Los Angeles and Long Beach and headed to Oakland and Sacramento to offload their goods. That brought the total number of ship diversions to 37.
Some Southern California apparel manufacturers have seen retailers cancel orders because goods are arriving after cancellation dates.
In an update of its 2004 revenue expectations, Los Angeles–based Tarrant Apparel Group noted that port congestion is one factor hurting the company’s financial well-being.
“Significant and increasing congestion of the West Coast ports has caused less-predictable delivery times and has resulted in increased cancellations and charge-backs,” said Barry Aved, Tarrant’s president and chief executive, in a statement. Tarrant, which has been having a tough time transforming itself from a private-label manufacturer to a company with its own brands, expects a net loss this year of $97 million to $99 million on sales of $157 million to $162 million. That compares with a net loss in 2003 of $35.9 million on sales of $320.4 million.
Other apparel manufacturers, remembering the congestion that hit the ports during last year’s Holiday shipping season, were more prepared than Tarrant.
“We haven’t experienced any delays yet, but we are anticipating them,” said Ron Perilman, president and chief executive of City Girl Inc., a $40 million company in Commerce, Calif., that makes four womenswear lines carried at department stores including Nordstrom and Dillard’s.
About 90 percent of City Girl’s goods come from Asia. This year, the company decided to bring in its Holiday goods in August and September and store them in the company’s 70,000-square-foot facility. “But our clearing agent informed us that the port is starting to back up,” Perilman said.
Executives at John Paul Richard Inc., headquartered in Calabasas, Calif., have seen the typical two- to three-day unloading period at the ports stretch to five to six days. About 80 percent of the $100 million company’s labels come from overseas.
“It’s adding a little tension to the end of the month,” admitted Ed Redding, executive vice president in charge of importing and sourcing. “A matter of four or five days can make a big difference in shipping an order on time.”
