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09/27/2021

Retailers Await Inventory as Ports Consider Operating Around-the-Clock

Supply chain challenges are adding up at America’s busiest ports, leaving retailers struggling to secure inventory.
Ports cargo

However, even as more than 60 ships are lined up to dock in the ports of Los Angeles and Long Beach, California, the port complex remains closed for several hours throughout most days as well as closed on Sundays. The mounting pressures to adapt to rising imports is causing the busiest port complex in the U.S. to consider operating around-the-clock, similar to major ports in Asia and Europe, The Wall Street Journal reported.

There are several challenges impacting supply chain issues that trickle across industries, including retail. The two ports in California that move more than 25% of U.S. imports are managed separately, with 13 private container terminals to operate. While Long Beach officials recently said they would look into operating 24/7 Monday through Thursday, a labor shortage is causing delays. Different areas of the supply chain, from shipping lines, port workers, truckers, warehouse operators, railways and retailers, are also disagreeing on how to solve the issues, blaming each other, the WSJ reported. 

“It has been nearly impossible to get everyone on the same page towards 24/7 operations,” Gene Seroka, executive director of the larger Port of Los Angeles, told the WSJ.

The shortages and import delays have affected some of the biggest retailers, including Nike, which recently noted in its quarterly earnings report that revenue is currently being capped due to low inventory. The length of time to move a cargo container has roughly doubled to 80 days compared to before the pandemic, according to Nike.

Retailers across the industry, as well as industry groups, have voiced their support for major infrastructure upgrades in a national spending bill. A coalition of businesses and trade groups have teamed up in support of the Ocean Shipping Reform Act, which aims to address maritime industry changes.

High import volumes, coupled with a labor shortage, has led to a messy situation in California, where empty containers need to be moved before new imports can make their way in. Recognizing the challenges, some retailers are looking for their own cargo solutions and forecasting the issues to stretch well into 2022.