The lockout at West Coast ports caused ripples through the global economy Monday as businesses from Hong Kong to Los Angeles scrambled to reroute shipments, find backup supplies and figure out who may be left holding the bag for delays that may quickly mount into the billions of dollars.
So far, the lockout has stranded at least 125 cargo ships loaded with half a million shipping containers outside ports from San Diego to Seattle.
Produce suppliers already are losing money as their vegetables shrivel on the docks. A Los Angeles recycler figures he has two more days, tops, before unshipped trash makes his refuse yard immovable. Some toy makers are worried that Christmas won't be coming if they can't get their shipments from the Far East.
"This is like being in the middle of a hurricane," said Charlie Woo, president of Megatoys, a Los Angeles toy importer that has containers of Christmas toys stranded on the water. "You know it is coming, and there's nothing you can do about it."
Indeed, the labor strife was not wholly unexpected, which gave many companies time to plan. Some shipped goods early or stocked up on inventory. But for most, the clock is ticking.
The West Coast's 29 ports handle about half of the nation's waterborne cargo and are the primary gateway for America's booming trade with Asia. There are limited sea-based alternatives in North America.
The port of Vancouver in British Columbia, Canada, is already operating at capacity, while the Mexican ports are small and ill-equipped to handle large vessels. In fact, many modern cargo freighters cannot fit through the Panama Canal to reach U.S. ports on the East Coast.
Air cargo is an option. But logistics experts say it is simply too expensive for heavy or low-margin goods such as toys, apparel, furniture or agricultural commodities.
"You can't take a container load and switch it over to air freight," said Guy Fox, an executive vice president with the Redondo Beach office of Global Transportation Services Inc., an international logistics firm. "The cost will go up 100 times."
The West Coast ports shutdown is the latest in a string of developments weighing on the U.S. economy. Analysts worry that a prolonged lockout or strike could quash the fledgling recovery, particularly in California which is heavily dependent on international trade.
