Tired of the Los Angeles and Long Beach port congestion that has delayed shipments, Brian Jablon considered every other option to avoid delivering his toy goods through the twin ports.
The executive vice president at Los Angeles-based Pacific Play Tents looked at ports in Portland, Seattle, Oakland, Oxnard and San Diego as potential entry points for his shipments of children’s tents, tunnels and accessories. He also looked at shipping goods via air freight.
But none was a viable option, he said, adding that for now, going through L.A. and Long Beach remained the least expensive option.
“The costs are horrendous,” said Jablon, who works for a family-owned company that employs 38 people. “The slowdowns are everywhere on the West Coast, and the cost difference between air freight and vessel freight are six to eight times greater.”
Meanwhile, his cargo is delayed by two to three weeks, and he’s still receiving holiday shipments at a time when he should be restocking for February, when the Chinese New Year shuts down Chinese factories for the celebration.
“It’s become a major, major problem,” Jablon said.
Businesses big and small have been looking at ways to either ship cargo by air or divert goods to other ports to bypass the West Coast congestion, caused by what port officials call a “perfect storm” of issues, including the lack of available chassis and unresolved contract talks between West Coast dockworkers and their employers.
That “perfect storm” has caused the ports of Los Angeles and Long Beach, the nation’s two busiest seaports handling 40 percent of U.S. imports, to lose business to competing seaports such as ports in Oakland, Georgia, others on the East Coast and even Canada, officials said.
A beef, pork and poultry exporter who weekly ships 300 to 400 containers of fresh and frozen meats from the West Coast recently told the Agriculture Transportation Coalition that the port disruption has prompted them to divert cargo away from the West Coast.
“There will be long-term negative consequences for U.S. meat packers if we become viewed by our foreign customers as an unreliable supplier,” the exporter said.
Clothing retailer New York & Co. had to spend about $2 million in additional freight costs to transport vital merchandise by air to ensure inventory. CEO Greg Scott said in a Dec. 3 earnings call that the company has also diverted remaining goods to East Coast ports and plans to continue doing that until deliveries through the West Coast can be more reliable, according to maritime trade publication Journal of Commerce.
Airports that handle air freight have also seen a recent boost in cargo volumes. Los Angeles World Airports saw freight air cargo jump from 161,064 tons in October 2013 to 174,175 tons in October 2014, according to the LAWA’s latest statistics.
At great expense, Gardena-based toy company Cloud b, which employs 48 people, had to airship container loads to supply products for customers because of the delays. Cloud b, which sells baby toys and products, earns 40 to 50 percent of its revenue during the holiday season.
>> Click here to access the entire article.