Port Disruption Damage Ticker

Businesses large and small and across many sectors share their views on the massive West Coast port cargo delays.    Labor peace may finally be returning to the West Coast ports, but the cargo delays that occurred because of low productivity were not theoretical. Importers and exporters were hit in their bottom line, and companies lost revenue and incurred extra expenses. Agricultural exporters in particular worry about lost opportunity costs if they can’t win back frustrated overseas customers. Retailers likely will swallow the extra costs rather than passing them onto consumers, which will compress their margins.
    With this in mind, American Shipper has compiled a list of examples of the pain experienced by certain industries and companies below. We’ve included examples of the impact, the name of a company and a source of information where available.
   Although the International Longshore and Warehouse Union and Pacific Maritime Association have settled their differences, pending ratification by their respective memberships, cargo backlogs will take weeks, possibly even months, to come down. American Shipper will continue to update Port Disruption Ticker with quantifiable examples of the impact on supply chains.
   We welcome feedback from individual companies and trade associations about the challenges they face. Please email us at releases@shippers.com.

   The following is a list of companies and industries that have reported being directly impacted by the port disruption, including dollar amounts where possible:

• The Container Store said it expects 1 cent per share to be knocked off its first half earnings because of the West Coast port delays (April 27 financial results) 
• Bed Bath & Beyond said it incurred extra costs to reroute imports to other ports. The extra transport cost contributed to a dip in net income (April 8 earnings call)
• Schnitzer Steel Industries said port slowdown was one of several factors contributing to a profit loss in its second quarter (April 9 financial statement)
• PacSun comparable store sales down 2-3 percent in 1Q and 30 percent spring goods are delayed (March 25 financial report and earnings call) 
• Restoration Hardware projects $10 million to $12 million lower revenue from delays for 1Q, with revenue shifting to 2Q rather than lost  (March 26 financial report)
• ConAgra said international sales were weak in 3Q ended Feb. 28 because exports were slow to move out of ports (March 26 financial statement)
• Lululemon Athletica experienced 0.3 percent drop in gross profit because of purchased airfreight to get around port slowdown. Expects $10 million sales hit in 2Q ending May 31 due to ongoing delays (March26 earnings call)
• New York & Co. said inventories were 12.4 percent higher because of more in-transit inventory and pre-buying (March 19 earnings report)
• Nike said port situation was drag on 3Q revenues and increased inventory levels (March 19 earnings report)
• Williams-Sonoma expects $30 million to $40 million reduction in net revenue for fiscal year 2015 (March 18 earnings report)
• Target encountered periods of light inventory in some assortments, but has contingency plans to continue to work around potential issues. (Target Chief Merchandising and Supply Chain Officer Kathee Tesija).
• Macy’s has had approximately 12 percent of its Q1 merchandise receipts delayed, particularly in apparel and accessories, and this will have an impact on sales, gross margin and expenses. (Macy’s CFO Karen Hoguet).  
• Tyson Foods has seen pressure on logistics that could eventually affect livestock producers and was even starting to see ground beef prices drop slightly. (Tyson Foods President and CEO Donald Smith).
• Containerized agriculture exports from the West Coast are running 50 percent below last year, or $1.75 billion less (AgTC).
• Meat and poultry shipments have lost $40 million per week (North American Meat Institute).
• Exports of hides, skins and leathers have lost $45 million per week (North American Meat Institute).
• Exports of hay and forage material have lost $25.6 million per month (U.S. Export Forage Council).
• French fry exports decreased $23.5 million per month (Washington Potato Commission).
• Oregon-based Mastercraft Furniture furloughed 180 people for two weeks (Mastercraft CEO Terry McNew interview).
• BOSSCO Trading, an Oregon straw exporter, is spending $2,000 per day in extra truck costs to Seattle and storage charges, while shipping 50 percent fewer containers than normal (Rep. Kurt Schrarder, D-OR).
• Conductix Wampfler of Omaha, Neb. saw import times double and costs triple (Sen. Deb Fischer, R-Neb.).
• Outdoor Gear Inc. of S.D. was forced to miss deadlines, pay late delivery penalties and pass up sales opportunities (Sen. John Thune, R-S.D.).
• BNSF Railway reduced eastbound train moves from L.A./Long Beach by 50 percent to 30 per week (BNSF).
• Cargill is losing pork orders from Japan, with the recent cancellation of 15 containers worth an estimated $1 million (Cargill).
• Oregon cherry growers lost $250,000 in export sales during January (AgTC).
• Maersk Line cancelled some sailings. (Maersk Line)
• COSCO, CMA CGM are skipping some ports on a loop. (CMA CGM)
• Honda Motor Co. slowed production at six U.S. and Canada plants because the facilities can’t get parts in time. (Honda).
• Ocean carrier APL says congestion cost it $15 million in Q4 2014 (APL).
• Softline Home Fashions has $800,000 worth of drapes for big box retailers stuck in ocean vessels outside ports and is using air freight for time-sensitive orders (WSJ).
• Coffee importer Serengeti Trading Co. is rerouting shipments to East and Gulf coasts and railing cargo back to roasters in California at an extra cost of $2,000 per box (WSJ).
• Bandar Foods of San Francisco received shipments of condiments from India four weeks late and worries its product will be replaced by others on store shelves (WSJ).
• Fuji Heavy Industries is spending $60 million per month to air freight components for a Subaru subsidiary in United States.
• Port of Oakland’s January TEU volumes were down 32 percent (Port of Oakland).
• Port of Long Beach’s January TEU volumes were down 18.8 percent. (Port of Long Beach).
• Ports of Seattle/Tacoma’s January TEU volumes were down 13 percent. (Seattle/Tacoma Seaport Alliance).
• Apparel company Perry Ellis had a $23 million revenue reduction in Q4 2014 (Perry Ellis preliminary financial results).
• Direct response marketing company Telebrands is losing $400,000 per day in sales and lost $5 million in business for Christmas season (Telebrands CEO Ajit J. Khubani interview).
• Toy company YOTTOY Productions has incurred tens of thousands of dollars in freight diversion costs (YOTTOY Productions CEO Kate Karcher-Clark interview).
• One midsized apparel buyer that makes 60-70 percent of sales in spring will now have its containers delivered at least six weeks late (Company owner call-in to KQED).
• McDonald’s is rationing french fries in Japan and using air freight to reduce shortages (multiple news reports).
• Linus Bike is diverting shipments to the East Coast and trucking them back across the country, more than doubling its total transportation cost (WSJ).
• Port of Portland lost Hanjin Shipping as customer. Hanjin represented 80% of port’s container business (Hanjin).