Ports Prepare for Holiday Rush As Last-Minute Shipments Flow
By DAVID GREENBERG
After a sluggish summer, the peak shipping season at L.A.’s ports has been picking up now that retailers are more encouraged about the holiday sales outlook.
Shipping activity was slow in August as retailers initially held off on holiday orders, owing to the sketchy economy and the ability, thanks to just-in-time delivery options, to readjust quickly if needed.
That’s what many have done. “All the vessels are pre-booked and they are all full for September and October,” said Guy Fox, executive vice president of customs services for Redondo Beach-based Stonepath Logistics Inc., which handles large retailers.
U.S. retailers are expected to generate $217.3 billion this November and December, a 5.7 percent increase over last year, according to the National Retail Federation. The projection was based on sales trends in July and August, factored in with federal tax refunds that went out during the summer.
“Import figures for September and October will be more reflective of the kind of holiday season we expect to have,” said Erik Autor, the federation’s vice president and international trade counsel.
Still, the retail outlook remains tentative at best, reflected by a drop in consumer confidence last month to the lowest level since the beginning of the war with Iraq. A separate survey of purchasing managers on manufacturing activity in the Midwest, also released last week, was slower than expected.
Some analysts question whether these numbers accurately portray the economic outlook and particularly its effect on consumer spending but the number illustrates the hazards faced by retailers in determining how much to order this holiday season.
This is borne out by inconsistent shipping patterns in recent months.
August container traffic totaled 1 million 20-foot equivalents (TEUs) for the combined ports of Los Angeles and Long Beach, virtually flat with the year-ago period.
Other container ports on the West Coast had mixed results in August. Traffic was up 9.9 percent in Tacoma, but down 4 percent in Seattle and down 0.5 percent in Oakland.
The economy notwithstanding, comparisons can be misleading because a year ago importers had been anticipating a port strike. As a result, August was the biggest month of the peak season as shippers rushed to import as much cargo as possible while the ports were still open.
“Basically, everything that had to be shipped was done by the end of August,” said Art Wong, spokesman for the Long Beach port. “Then there was a drop off.”
TEU counts for the L.A.-Long Beach port complex fell 100,000 last September and nearly 300,000 last October compared with year-earlier figures. Then came an abysmal December selling season.
While importers remain optimistic this will be a better holiday period, they are keenly aware of the risks.
With consumer confidence still weak and national unemployment continuing to hover above 6 percent, L.A.-based Megatoys Inc., played it safe in August before doubling the amount of cargo it shipped in September.
“The indications are that (Christmas) will be better than last year, but most of my retail customers are a little hesitant,” said Chief Executive Charlie Woo.
“We still have some Christmas stuff left over from last year that we have to sell this year,” said Nancy Allard, operations manager for Warisan, an L.A. furniture and household accessories store.