* 2009 U.S. import cargo volume seen as lowest since 2003
* Ports hope for late holiday bump in shipments
* Port of Los Angeles sees flat traffic through year end
By Laura Isensee and Lisa Baertlein
LOS ANGELES, Oct 20 Foreman Danny Miranda
remembers the days when the Los Angeles and Long Beach,
California, ports were so jammed that ships waited in line to
unload. Now the lingering recession has longshoremen waiting in
line for work.
After a year of grappling with fewer shifts and falling
wages, Miranda and other union port workers hope a surprise
jump in September retail sales will fuel a late-season bump in
holiday cargo. [ID:nN08474084]
"Out of seven days, only two we see work. The last quarter
it would be four days out of the seven," said Miranda, a
veteran port worker and president of the International
Longshore and Warehouse Union Local 94 representing foremen.
"We're always hoping for that. But we don't see that,"
Miranda said of a pick-up in demand.
Major retailers, such as Wal-Mart Stores Inc (WMT.N),
Target Corp (TGT.N) and Nike Inc (NKE.N), use the ports of Los
Angeles and Long Beach to pipe tons of clothes, televisions and
other goods from Asia and the Pacific Rim to U.S. shopping
malls for the holiday season.
Many of them have cut their store inventories by as much as
25 percent this year, fearing they could again get stuck with a
glut of merchandise like the one that ate into profits in
The bulk of holiday shipping hits U.S. ports in August and
September. This year, the number of manufacturers shipping to
U.S. companies fell 5 percent from August to September, the
steepest drop since February, according to research firm
While September usually brings an increase in holiday
cargo, imports at the ports of Los Angeles and Long Beach sank
last month, falling 16 percent and 19 percent from a year
Overall, import cargo volume at the nation's major retail
container ports is expected to total 12.5 million containers in
2009, down nearly 18 percent from 2008 and the lowest since
2003, according to the National Retail Federation and IHS
"There are probably not a lot of companies that are
expecting a real V-shaped recovery here given the continuing
constraints on household perception of wealth," said Paul
Bingham, an economist with IHS Global Insight.
ON THE WATERFRONT
There have been similar slowdowns at Southern California
ports, where workers fear the holiday bump has come and gone.
Warehouse worker Anthony Mora, 30, has been looking for a
job in California's Inland Empire, a major distribution hub
about one hour east of Los Angeles, for more than a year.
"It's really slow ... We need the economy to get better,"
Unemployment of nearly 10 percent and tougher rules on
credit cards and home equity loans likely will rein in splurges
on holiday gifts -- even for some people who are working.
But some industry experts say the decision to slash orders
is overdone, especially in the event of a holiday miracle in
which shoppers feel bold enough to spend.
Sixty percent of chief financial officers at big U.S.
retailers still fear that the biggest risk to holiday sales is
excess merchandise, according to a poll from accounting and
consulting firm BDO Seidman LLP. But 40 percent worry that
shortages are the biggest concern.
It may be too late for many retailers to pull the trigger
and order more inventory to cash in on any late surprise in
demand, since it takes about six weeks for goods to get shipped
and move through distribution systems.
For those looking to home-grown manufacturers to fill in
the gap, few factories may be still available to cater to
last-minute demand. [ID:nN19381752]
"If you haven't ordered something by early September you're
running it really close," said Art Wong, spokesman for the Port
of Long Beach.
Even when economic growth returns, economist Bingham
doesn't expect port traffic to return to the levels seen before
the global financial crisis. He expects post-recovery shipping
to be more like levels seen around 2003, "before things got
going in a heated fashion."
At the Port of Los Angeles, Kathryn McDermott, the port's
deputy director of business development, agrees that the good
old days of double-digit growth may be over.
"That's not part of what we're planning for," she said.
(Editing by Michele Gershberg and Gerald E. McCormick)