Retailers See Trouble on Ports' Horizon

Shipping lanes were clogged. Giant cargo vessels sat idle outside the ports, and their goods -- electronics, clothing, toys and furniture -- waited as long as a week to be unloaded. And frustrated importers scrambled to get their goods to market on time.

The congestion's cost to the U.S. economy was estimated by former U.S. Transportation Secretary Norman Y. Mineta to be as much as $70 billion.

Today, the nation's two largest cargo ports are handling another record pace with aplomb. But memories of the congestion remain.

"Everyone paid a price in 2004," trade economist Paul Bingham said. "CEOs told their supply chain people not to let this happen again. Shareholders said this cannot continue if these assets are going to make us money.

"There was too much money lost by too many players," he said.

As a result, some of the nation's biggest shippers have been working to prevent similar problems in the years ahead.

For now, the buzz is back. Cargo shipments at Los Angeles and Long Beach are outpacing all competitors on both coasts.

Business lost in 2004 has come back to Southern California. Dockworker shortages are a thing of the past, and the ports remain the only major harbor in America where the terminal gates are open for business at night and on weekends.

"Things are looking good this year. The railroads are prepared. Labor is prepared, and that's reflected in the volumes we are seeing," said Geraldine Knatz, executive director of the Port of Los Angeles, adding that "there is a new level of confidence out there about San Pedro Bay in general."

The two ports are smoothly unloading and sending ships back on their way within 35 to 50 hours of arriving at their berths, said Richard B. McKenna, deputy executive director of the Marine Exchange of Southern California, which tracks port traffic.

But nobody at the massive harbor is ignoring 2004. Nor have the nation's retailers forgotten an even more costly labor contract fight between shipping lines and dockworkers in 2002 that idled all West Coast ports for 11 days.

Unfortunately, experts say, other problems are on the horizon.

"We see this as the lull before the storm," said Erik Autor, vice president and international trade counsel of the National Retail Federation.