The West Coast port lockout may be over, but the resulting backlog of containers could hurt marketers throughout the holiday season.
Among the company presidents and CEOs surveyed by the National Retail Federation (NR), 38.9% expect a shortage of merchandise this holiday season, says NRF spokesperson J. Craig Shearman.
The Pacific Maritime Association (PMA), which represents shipping companies and terminal operators, closed 29 major West Coast ports on Sept. 29 after alleging that International Longshore and Warehouse Union (ILWU) workers were staging work slowdowns. The ports, which handle more than $300 billion in trade annually, account for more than half of all containerized cargo moving in and out of the country. On Oct. 8, President Bush issued a court-ordered truce to keep the ports open through the Christmas season, which accounts for 40% of retailers’ annual sales.
The good news is that most of the containers have been loaded off the ships and into storage yards. But the PMA is charging that union workers responsible for clearing the backlogged merchandise are still staging working slowdowns. According to the PMA, the dock workers are operating at 30% below capacity, Shearman says.
As a result, the NRF estimates, the backlog might not be cleared until the middle of December. Some of the merchandise, then, might not make it to catalogers and retailers until after Christmas.
The backlog of containers on the West Coast has affected Charlotte, VT-based Hearthside Quilts “to a degree,” says president/owner George Wachob. “Customers in Hawaii and Japan are calling and wanting to know where their quilt kits are. Most are somewhat agitated but are willing to ‘wait patiently’ for a little while anyway after we explain about the strike.”
But other catalogers say that the port situation will have little, if any, impact on them. “The majority of our holiday merchandise was already in the pipeline” prior to the lockout, says Stephanie Brown, spokesperson for Plano, TX-based J.C. Penney Corp. “There may be a few items that might be affected in replenishment, but it’s not an issue.”
“There was minimal effect for us,” says Bloomingdale’s Direct president Franz Weiglein, “because we had anticipated the problems. So we changed some of the routing to air rather than by sea on goods that hadn’t shipped. Or we advanced some of our shipments, so we were okay. It was just too critical a holiday season to have things caught up for us.”