Union Pacific Woes Lead to Harbor Tie-Up
A nationwide shortage of rail cars and an unexpected surge of imports have created serious tie-ups in the Los Angeles and Long Beach ports, forcing some shippers to divert vessels to other harbors and threatening to delay critical delivery of Christmas goods to retailers.
The two Southland ports are the nation’s busiest, but in recent weeks carriers have had to wait two to four days just to dock, and it is taking up to a week more to move unloaded containers off the docks. In normal times, ships berth immediately, and the cargo is moved within a day or two at most.
“I feel tremendous pressure from my retail customers because I’m not getting the merchandise to them on time,†said Charlie Woo, owner of Mega Toys, a Los Angeles toy distributor.
Jay Winter, executive secretary of the Foreign Trade Assn. in Los Angeles, said he doesn’t expect the bottleneck at the ports to clear up until at least November after the rush of Christmas shipments passes.
“I don’t think there’s any immediate end in sight,†he said.
The logjam is being caused largely by troubles at Union Pacific Railroad, which handles most of the intermodal cargo moving through the Los Angeles-Long Beach harbor.
The railroad has been plagued with equipment, service and labor problems since its merger with Southern Pacific Railroad last year, creating nationwide delays in the delivery of raw supplies and finished goods.
There also have been some safety problems.
The U.S. government on Thursday dispatched 85 federal and state safety inspectors to review the southern region operations of the railroad, which has had two major collisions in a week.
“It is a problem, the whole transportation community is impacted,†said Kurt Von Zumwalt, spokesman for Nissan Motor Corp. USA in Carson.
“Everyone has been experiencing some problems, with the real hot spots in Texas and Los Angeles and the routes in between.â€
Von Zumwalt said Nissan shifted to the trucking industry to haul most of the cars it brings into the West from Japan.
Toyota Motor Sales USA Inc., among others, took a similar step.
In general, the big nationwide retailers don’t expect to see a major fallout from the transportation logjam.
Companies like Kmart Corp. said they have already stocked their distribution centers.
But with trucking transport capacity also being stretched, many other businesses have had little choice but to rely on rail.
“It’s becoming a real headache,†said Rick Hormuth, president of Orange County Lumber Co. of Rialto, which has been waiting a month for the arrival of a shipment on 30 Union Pacific cars which a stuck in a rail yard about 5 miles away in Colton.
Companies awaiting merchandise from the ports, however, have an even additional wait.
About half of the merchandise that arrives in the Los Angeles-Long Beach harbor are shipped to other parts of the country, mostly by rail.
But with a shortage of rail cars, especially at Union Pacific, the Los Angeles and Long Beach ports have been forced to stack containers higher and higher.
That in turn has put an undue strain on dockworkers, who were in short supply to begin with. The Longshoreman’s Union has been dispatching 30 workers a day to help alleviate the problem, but they have been unable to catch up with the heavy traffic.
Tie-ups are also hampering other West Coast ports, but the problem is most severe in Southern California, and it has been exacerbated by a crush of Christmas shipments that nobody expected. Container traffic at Long Beach, the bigger of the two Southland ports, jumped 20% in September from a year earlier.
“September is the holiday rush,†said Yvonne Avila, spokeswoman for the Port of Long Beach. Avila and others say cargo traffic is heavier than expected because of the strong economy, retailers expectations for a very bright Christmas and the deflated Japanese yen and other Asian currencies that makes imports cheaper for U.S. companies.
In many ways, Avila said, it’s terrific that the ports are so busy. But she also expressed concerns that the congestion will drive some customers away to other ports or to ship goods to the East Coast.
“We hope we don’t lose business in the long run,†Avila said.
To date, only a few carriers have diverted their vessels to other harbors, but port officials say that number could grow because there are still 10 ships that are at anchor waiting for berthing space in San Pedro and Long Beach.
APL Ltd. of Oakland earlier this month rerouted three ships that were headed for Los Angeles to the port in Oakland. Spokesman Gil Roeder said his firm is considering other routing changes to satisfy customers.
“So far, the loss has been minimal,†said Al Fierstine, director of business development at the Port of Los Angeles. “We’ll get through this,†he added. “The cargo will come back.â€
Union Pacific executives say they expect to fix their problems by the end of the year, but that will be too late for some businesses.
“Christmas can never be postponed,†said Woo of Mega Toys. “The containers aren’t being unloaded. There’s nothing we can do.â€
Times staff writer John O’Dell in Orange County and correspondent Diane Seo contributed to this report.
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