SAN FRANCISCO — U.S. ports, railroads and highways are ill-equipped to handle increasing demand to transport goods arriving by ship on the West Coast, according to a new report prepared by leading consumer-goods importers.
The alliance, known as the Waterfront Coalition, includes retailers such as Target Corp., J.C. Penney Co. and The Limited. Its report, “A Call to Action,” urges creation of a national policy focused on more efficiently moving imported freight from ports onto trucks and railroads en route to their final destinations.
“The promise of continued economic prosperity depends more than ever on the ability of business to reach international markets while receiving finished goods and raw materials from abroad,” the report said.
The group also concluded that the U.S. has an “imbalanced” situation where 40 percent of all imported freight shipped in containers from Asia arrives at the side-by-side ports of Los Angeles and Long Beach. Among the coalition’s recommendations are ways to more evenly spread trade from the Far East among other West Coast ports.
The Los Angeles-Long Beach ports combined are by far the largest port facility in the nation in terms of value and volume of freight cargo. For the fashion industry, they are also a key gateway for merchandise, last year handling about 88 percent of all apparel imported from Asia in terms of wholesale value, or $13.52 billion, according to the U.S. Commerce Department. Asia supplies about 43 percent of all apparel sold in the U.S.
The 49-page report from the coalition, which also counts Gap Inc., Nike, Liz Claiborne, Payless, Best Buy, Toyota and Sony as members, was released as the anniversary approaches of last year’s July to October cargo backups — as importers anticipated quotas being filled — at the Los Angeles-Long Beach ports that caused delivery delays and in some cases empty store shelves.
Some changes have been made at the ports and importers are somewhat optimistic there won’t be a repeat of last year’s cargo calamity. One key change is the use of PierPass, a program that aims to improve the flow of goods through the ports. Starting late next month, goods can be picked up free of charge during off-peak hours, but otherwise face an $80-per-container fee.
Manpower at the twin Southern California docks also has been increased. In addition, importers in some cases have been doing their part to ease port congestion by sending cargo to other West Coast ports when possible and shipping nonseasonal goods early.
However, these are just short-term fixes, the importer coalition argues.
“Even if we don’t have the same problems again this year, you’re fooling yourself that we don’t have a capacity issue long-range” for transporting goods domestically, said coalition executive director Robin Lanier.
The coalition’s recommendations include:
- Reducing the time cargo containers are allowed to stay on docks once they’re unloaded and creating truck cargo pick-up and delivery appointments.
- Bolstering business at ports in Oakland, Calif., Portland, Ore., and Tacoma/Seattle, Wash., with federal tax breaks as incentives for privately run railroads to move faster to expand rail-to-port service.
- Collaborating between importers and ocean carriers to change foreign manufacturing and shipping schedules.
- Measuring capacity and productivity at ports and cargo terminals.
- Creating a federal freight-transportation funding policy for ports, railroads and highways.
Lanier said the report marks the first cohesive effort on the part of importers to study the scope of U.S. freight transportation needs. The coalition will now use the document to help shape transportation priorities in California and elsewhere, both public and private.
The region surrounding the Los Angeles-Long Beach ports is resisting a call for cargo to be shifted to other West Coast ports. A $10.5 billion project — the West Coast National Freight Gateway Area — has been proposed to move goods from the ports inland by light rail and improve highways for trucks.
“We would like to see trade in Southern California grow,” said Jack Kyser, chief economist with the Los Angeles Economic Development Corp.
Kyser criticized several of the importer coalition’s proposals as “pie in the sky,” like its call for the Panama Canal to be expanded to enable Asian trade to more easily reach other parts of the U.S.
Steve Hennessey, chief operating officer with the Pacific Maritime Association, which represents marine terminal operators, was more complimentary of the coalition’s report, but questioned the value of diverting traffic.
He said his biggest West Coast cargo concern is whether the railroads and highways “will keep up” with ports processing cargo.