America’s Busiest Port Expects 25% Drop in Imports As Coronavirus Disruptions Mount
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As the footwear industry continues to cope with supply chain impacts from the coronavirus outbreak, America’s busiest port has said it expects to see imports fall 25% in February.
The executive director of the Port of Los Angeles, which together with the neighboring Port of Long Beach handles almost 38% of all U.S. container imports, told the Wall Street Journal that cargo volumes have plummeted following extended closures of factories and production delays in China, where the virus originated.
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Shipping companies have canceled 40 sailings to the port between Feb. 11 and April 1, he said, with most of the vessels coming from China. About half of all shoes and apparel sold in the U.S. moves through the twin ports, according to the American Apparel and Footwear Association, making the situation one of significant concern for the footwear industry.
In 2018, the Port of Los Angeles handled more than 233,000 containers worth of shoe imports, much of which was then sent to the eastern half of the country. The shipping hubs have been on the front lines of President Donald Trump’s trade war with China throughout the past two years, managing fluctuations in imports and exports from companies trying to avoid mounting tariffs. In 2015, the West Coast ports were at the center of a drawn-out labor dispute that led to months of slowdowns and delays, affecting U.S. inventories.
“For the apparel and footwear industry, the port disruption was our number one trade barrier, and something we very strongly feel cannot happen again,” then-AAFA CEO Juanita Duggan said in a statement at the time.
Today, coronavirus-related disruptions are almost certainly the top barrier, as global efforts to stop the virus’ spread necessarily slow down trade. Around the world, the total number of cases of the virus, officially called Covid-19, now exceeds 80,000 and nearly 3,000 have died.
In China, according to a report from Resilience360, a supply chain risk assessment platform, “Varying degrees of city-wide restrictions like home quarantines, temperature checks and vehicle checks have hampered the ability of workers to reach factories, thereby creating serious labor shortages.”
Many retailers with operations in China, including Nike, Ralph Lauren and Kering, have also chosen to close stores and reduce operating hours in heavily affected areas, which they’ve warned will affect their bottom lines.
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