(The following article by Constance L. Hays was posted on the New York Times website on October 26.)
NEW YORK — Retailers gearing up for their annual sales push for the December holidays are being forced to wait longer than usual this year for Asian-made goods that – thanks to a backup of cargo ships, railroads and truck lines – are sluggishly making their way from ports to warehouses and ultimately, to shoppers.
Rapid growth in imports from countries like China and India, up as much as 20 percent from a year ago, has added to the congestion at major West Coast ports like Long Beach, Calif. At the same time, port officials say they are shorthanded when it comes to unloading containers, and others involved in shipping say rail lines and trucking companies are also overextended.
Some retailers will not discuss the situation, while others play down its impact. It appears unlikely that goods aimed at holiday shoppers will remain out of reach through the holidays, but costs may rise for retailers who resort to air freight or pay premiums on steamship lines to get those products to American shores and into their stores.
The peak season for holiday-focused importing lasts from July through mid-November.
Cargo handlers and retailers acknowledge delays of several days to several weeks. Shoppers, meanwhile, are receiving notices that advise, “Your item is on back order,” with delivery indicated in late November in some cases.
“It is probably not going to be a Category 5 hurricane, but it is certainly going to impact retailers are they get ready for the Christmas rush,” said Peter H. Powell, chairman of the National Customs Brokers and Forwarders Association of America, which monitors activities at ports around the nation. In the meantime, his own conversations with clients about delays have “doubled or tripled,” he said. Some of the best-known names in retailing say they are feeling the pinch. “It’s having a slight impact on our shipments to our distribution centers,” said Kim Terry, a spokeswoman for Gap. “But we’ve been able to recover some of that time due to flexibility in our supply chain. It’s not having a significant impact on our stores.”
L. L. Bean’s goods from Asia arrive in Vancouver before being shipped by train across Canada, and “we are experiencing some delays, on the order of two to five days,” a spokesman, Rich Donaldson, said. “It’s nothing to the extent that others coming through the other trans-Pacific ports are experiencing.”
Others did not want to elaborate. “We just don’t feel comfortable commenting at this time,” said Jenny Osmond, a spokeswoman for Williams-Sonoma, which imports many of the products sold through its Williams-Sonoma, Pottery Barn and Hold Everything stores and catalogs.
At Crate and Barrel, some orders for rugs, furniture and leather goods are being shipped by air these days, said Bill Helms, a customs broker for Schmidt-Pritchard in Chicago who handles imports for the retailer, among other companies. A Crate and Barrel spokeswoman would not comment.
Some importers are blaming Wal-Mart, with its behemoth loads of goods from Asia, for squeezing more of those goods into a narrower shipping window to save money and slowing activities at ports for everyone else.
Wal-Mart executives say this is nonsense, adding that their company’s increase in imports, up about 10 percent, matches store expansion and sales growth. “Both of those we’re experiencing,” said Rob Kusiciel, the vice president for global services.
Another frequently criticized target is the dockworkers’ union, which some companies say has delayed the hiring of more people to unload container ships arriving in major ports like Long Beach.
Railroads are also being blamed for the slowdown. A spokesman for Burlington Northern-Santa Fe, Joseph Faust, said there were “record volumes on the major railroads operating in the West, and some major challenges.”
He added, however, that “we are able to service customers and maintain regular schedules.”
Trucking lines, too, are grappling with record demand, but do not have enough qualified drivers and are experiencing a shortage of equipment, said Jeff Lyskoski, a vice president for RPM Transportation in Santa Fe Springs, Calif., a midsize shipping company.
“It’s not just Wal-Mart. We handle the Toys “R” Us containers and the Mattel containers,” he said. “But considering Wal-Mart’s volume, they are a major contributor to what’s taking place. When they flex, it’s sure to have repercussions.”
Whatever the cause, the fact remains that for many retailers that rely on Asian imports to stock their shelves, the process is turning out to be extra complicated this year. Some say it is likely to worsen as the holiday season approaches.
“They are just frustrated that things are taking so long,” Mr. Helms said, noting that a five-day delay in unloading a ship could become a 12-day delay by the time products reach their destination. “At this point, they know there is nothing else they can do.”
Don Snyder, marketing manager for the Port of Long Beach, called the conditions “not a good situation” and predicted that “for the rest of this peak season, it’s going to be a catch-up game.” Daily bulletins from the port show dozens of ships idling at anchor, waiting for their turn at a dock where their containers of shoes, toys, furniture, frying pans and other consumer products can be unloaded by workers.
“We are moving record amounts of volume here,” Mr. Snyder said, adding that the port has trained nearly 1,000 new workers this year. “We’ve been experiencing 15 percent to 20 percent growth all year, and it’s just been a phenomenal increase.”
But he said cargo ships were three to four days behind schedule for unloading. He called it the “longest delay since the 10-day lockout” in October 2002 that brought the port to a virtual halt.
“If you have shipments delayed by four to seven days, and you have just-in-time inventory, or you have products coming in against an advertisement, that can be a major problem,” Mr. Snyder said. “And it costs the shipowners a lot of money to have their assets sitting there.”
At the same time, the Union Pacific railroad, a major transporter out of the port, lost many employees to retirement, he added. Half of all containers unloaded at Long Beach are placed on railcars for destinations in the Southwest and elsewhere, he said. But a Union Pacific spokesman, Mark Davis, said that the railroad had put 1,200 new hires to work in the third quarter and that the railroad was no longer experiencing delays out of Long Beach.
Congestion at the Long Beach port has caused problems in the past, and for some companies, that meant a rethinking of logistics months ago. At Sears, Roebuck, shipments from Asia are being routed to other ports on the West Coast, said Tony Brooks, the company’s vice president for transportation and logistics. He would not name the ports. “I don’t know how much we want to convey strategically,” he said, “but there are a number of things we did.”
He added: “You’re seeing double-digit increases in the amount of containers flowing on the trans-Pacific trade lane. You couple that with factors in how freight flows into that peak season, and there is a recipe for bottlenecking.” Sears sells hundreds of items made in China, although Mr. Brooks would not say what percentage of the company’s products were imported.
Ms. Terry of Gap said that the company had sent ships to other ports as well.
At Wal-Mart, “we’re seeing the typical peak-season challenges,” Mr. Kusiciel said. “We haven’t seen any delays” resulting in stores’ being out of products. This year, Wal-Mart moved to deal directly with manufacturers in places like China, rather than going through a third party.
“We’re working to identify suppliers and manufacturers around the world to drive as much efficiency into the process as we can,” he said. At the same time, “there’s nothing really different about the way we’re flowing merchandise this year,” he added. “Volume is slightly higher but it’s consistent with the fact that we’ve got more units open this year.”
About $15 billion of Wal-Mart’s $256 billion in sales last year came from goods made in China, he added.
Even growth of 10 percent or so, with 300 new stores this year, makes Wal-Mart an increasingly influential player, others said. “We deal with 10 to 15 steamship lines, and Wal-Mart uses all of them, so there’s no way out,” said Belle Morales, vice president for sales and marketing at Dynalink Systems, a freight forwarder in Inglewood, Calif. “This is not going to destroy everyone else but it will definitely affect all of the shippers from overseas.”