Ports Weren’t Overwhelmed by Holiday Shipments This Year

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Last year, holiday imports overwhelmed the ports of Los Angeles and Long Beach.


This year, staggered operating hours, larger ships and more dockworkers have allowed the local ports to handle record amounts of goods with aplomb.


It’s the other side of the Pacific that’s feeling the strain.


The boom in goods leaving China has strained ship space there, so apparel manufacturers are sourcing more production to other Asian countries such as Thailand and India.


Those locales, however, are farther away, and add a week or two to ocean shipping. With much of the cut pieces used in those countries coming from China anyway, the benefits of shifting production to another country are limited.


So manufacturers are increasingly shipping by air.


Marco DeGeorge, co-president of Commerce-based Color Image Apparel Inc., which produces Bella brand young women’s contemporary clothes, said he relies on air freight for last-minute orders or shipments of small lightweight items because of the long shipping time from Asian countries.


“If you ship things from China, it takes two and a half weeks, and from India it takes 30 days,” DeGeorge said. “If you might lose a sale, you have to use air. The customer won’t wait.”


DeGeorge said his company does about half its production of fleece pants and knitted ribbed tops overseas, mostly in Asia, and ships about 5 percent of it into the U.S. by air. He said he increased his reliance on air freight as he shifted more production overseas.


“With domestic production, if you had to get something to a client immediately, you could have it made really fast,” said DeGeorge. “Now, once you’ve got so much of your production overseas, you rely more on air freight.”


While costly, air freight is fast, which is important to small apparel companies that need to turn out new clothes quickly to keep up with rapid changes in fashion, said Robert Krieger, president of Norman Krieger Inc., a Rancho Dominguez-based freight forwarding and customs brokerage company.


Import tonnage at Los Angeles International Airport rose 7.8 percent in August, according to data from the Los Angeles County Economic Development Corp. Year-to-date through August, international freight arriving at LAX totaled 435,962 tons, up 7.1 percent from 407,140 from the like period a year earlier.


Importers are willing to pay more than three times as much to send critical shipments by air. This includes apparel companies, that are using air freight “as a way to bring in orders as late as possible, to get fashion that is as close as possible to the holidays,” Krieger said.


Meanwhile, port officials, importers and shipping companies not to mention port officials are relieved that only 15 container ships are at anchor outside the ports of Los Angeles and Long Beach, instead of the 90 that were backed up at one point.


Terminal operators have hired thousands of additional dockworkers, the PierPass program is moving a third of cargo traffic out of peak traffic hours into nights and Saturdays, and the railroads are investing in new equipment and labor. There also appear to be fundamental changes in how importers order goods.


Also smoothing the process are large retailers such as Target Corp. and Wal-Mart Stores Inc., which started spreading out their imports to other ports such as Houston and Oakland to mitigate the risk of congestion at Los Angeles and Long Beach. Their suppliers started importing goods earlier or later to avoid peak traffic periods.


“We were busier earlier than normal,” said Krieger, whose firm works primarily with companies that manufacture apparel, shoes and other consumer products. “The peak didn’t get as high and it lasted longer.”


In Asia, shippers have had a harder time keeping up with the surge in global trade.


While there is some vessel capacity remaining from Asia to the West Coast for the holiday shipping season, all available space from Asia to the East Coast has been booked since spring, according to the Journal of Commerce.


This problem should be abated as shippers take delivery of some 75 vessels by the end of 2006.


There is now enough capacity on the West Coast to handle 1.5 million additional containers, said Joseph Magaddino, chairman of the department of economics at California State University, Long Beach. But that’s the anticipated growth at just the ports of Long Beach and Los Angeles for next year.


“We’ve done some things to improve the overall ability to handle container traffic throughout the region,” Magaddino said. “You can divert traffic to Oakland or Seattle, but once those ports get constrained, there’s not a lot of capacity left. The real problem is what’s going to happen next year.”

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