Report: West Coast ports running at 50%-60% of capacity; retailers stockpile inventory

Los Angeles -- The 29 West Coast ports, which handle 44% of container cargo in the U.S., are currently running at approximately 50-60% capacity, according to a report released Thursday by CBRE Group, the world’s largest commercial real estate services and investment firm. Five of the ports — Los Angeles, Long Beach, Oakland, Tacoma and Seattle — are among the top 10 largest and busiest ports (by total TEU volume) in the United States.



“We’re starting to see major retailers reporting losses as a result of this on-going dispute, and this is likely to continue for some time even after a resolution is reached as backed-up product works its way through the supply chain,” said David Egan, head of industrial research, Americas, CBRE.



With over 30 ships (and growing) waiting to dock at the Port of Los Angeles and Long Beach, the backlog for ships to unload their containers is currently 45-60 days. As such, the supply chain implications will last well beyond the date of any agreement between labor and management.



Key highlights of the report:



• In response to the situation, retailers and manufacturers have been stockpiling inventory in warehouses, moving goods by air and shifting some shipments to East and Gulf Coast ports. This movement of goods has put significant stress on the “just in time” inventory scheme used by many supply chain networks and has added significant costs.



• The immediate impact on industrial real estate located near the West Coast ports will be minimal, but port markets on the East Coast may see a short-term boost in warehousing demand as shippers shift cargo away from the West Coast gridlock.



“If the dispute is not resolved quickly, we will see significant ripple effects throughout our regional and national economies,” said Kurt Strasmann, senior managing director, port logistics group.