HONG KONG — A U.S. West Coast port lock out would be “a catastrophe beyond belief” for the footwear industry that imports the vast majority of its products through the terminals at Los Angeles-Long Beach, said Matt Priest, president of the Footwear Distributors and Retailers of America.
Priest is alarmed at the escalating tensions between the Pacific Maritime Association and International Longshore Warehouse Union, as concerns mount that the acrimonious negotiations are heading towards waterfront employers locking out the longshoremen.
“We have sent letters to the President, to the PMA, the ILWU, and one went out today to 200 organisations, imploring them to come to some kind of agreement because of the importance imports play in our economy,” he said.
“Both from a consumer point of view, and also an employment perspective it would be a catastrophe beyond belief. A huge disaster for us. My hope is that cooler heads will prevail and an agreement will be reached.”
The import numbers for footwear are incredible. From January through November, the latest figures available, 2.166 billion pairs of shoes were imported into the U.S., almost 95 percent of which were made in China. In the 11-month period, 866 million pairs of shoes entered the U.S. through the ports of Los Angeles-Long Beach. The port complex handles 68 percent of international footwear imports, according to PIERS data.
“This is a critical period for the U.S. footwear industry that is building up inventory for the Easter period when a lot of shoes are sold,” Priest said. “In July and August is another big shipping period to catch the back-to-school sales, and then there is the end-of-year holiday season.”
Priest said he was fortunate to tour the Port of Long Beach in October and saw first hand the ships backed up and the congested yards, so he had a good idea of what was coming and could inform members.
“The spring and early summer footwear is being imported now, but a lot of our members have been prepared for what is happening and started bringing in footwear early, putting it in warehouses, or air freighting things in if they needed to get to retail stores quicker.”
A lock out of longshoremen would force shippers to divert their cargo and try to enter the U.S. via alternative gateways, but Priest said the options were not ideal.
“The alternatives are to divert to other ports in Canada and truck cargo down to the U.S., or to ship via Houston or the East Coast. The East Coast ports are great and provide good services to the Eastern Seaboard, but do not nearly have the capacity of the Southern California ports,” he said.
Stephen Ng, OOCL director of trades, said he was not aware of any breakdown in talks between the PMA and the ILWU and the likelihood of a lock out, but he said if it happened, the alternatives were limited.
“As the situation is affecting the whole of the U.S. West Coast, carriers would have little option in switching or omitting port calls,” he said.
The senior Asia executive of one of the world’s top 10 carriers, who declined to be named, said if port operations on the West Coast came to a halt, demand via the East Coast would go up and customers would pay the price.
“There is simply not enough port and ship capacity to replace the U.S. West Coast flows. Capacity can’t just be made up,” he told JOC.com.
“Lines will also suffer as a large part of their ship and container fleet will be occupied with waiting, which will have a negative impact on the bottom line.”