A shortage of transportation equipment and possible labor disruptions at the busy ports of Los Angeles and Long Beach, Calif. could cause significant delays in the shipping of holiday merchandise for large retailers, including Menomonee Falls-based Kohl’s Corp.
The delays could spell trouble for giant retailers eager to restock their shelves in stores and send gifts to consumers ordering online.
Other retailers reported to be affected include J.C. Penney Co., Macy’s Inc., Nordstrom Inc., American Eagle, Ralph Lauren and Carter’s. Retail giant Wal-mart Stores Inc. recently diverted 300 shipment containers to Oakland, Calif. to avoid the congestion.
The problem stems from a shortage of trucking equipment, called chassis, which are used to haul cargo to warehouses from the ports, according to a report by Reuters.
However, the National Retail Federation said protracted labor negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union also are having an effect on backlog. The contract expired July 1. Dockworkers remain on the job as negotiations continue but the lack of a contract and operational issues have led to record congestion at the ports, the NRF said.
The import numbers come as NRF is forecasting 4.1 percent holiday season sales growth and 3.6 percent growth for 2014 overall.
“The consumer is back,” Hackett Associates founder Ben Hackett said, citing reduced unemployment, improved consumer confidence and other indicators. “That’s all good news for retailers, ports and shipping lines.”
Cargo containers typically take two to three days to move out of the port.
Many retailers have already started to divert their merchandise to other port locations in the Pacific Northwest, the East Coast, the Gulf Coast and Canada, away from the country’s busiest ports, but that shifting will add to their costs.