The major U.S. West Coast seaports are facing continued congestion challenges after a surge in traffic that has lasted all the way through peak shipping season. That has led operators at The Port of Los Angeles to prioritize onward delivery of toys, with port Executive Director Gene Seroka stating, "We're essentially in a triage situation" in doing so, Reuters reports. Failure to deliver seasonal products on time could lead to long-term inventory issues for retailers, as outlined in Panjiva's research of Dec. 17.

Panjiva's data shows that The Port of Long Beach has seen a faster growth in imports of toys with growth of 31.3% year over year in the three months to Nov. 30 compared to 1.6% in the case of Los Angeles.

While increasing volume is good news for the ports, congestion may be harmful in the long run. Importers may look to spread their shipments through multiple lines and destinations — for example Seattle/Tacoma on the West Coast, or potentially transshipping through Mexico.

Another possibility would be to transit the Panama Canal and ship through container ports like Houston or Mobile, Ala. — allowing access to alternative rail lines and interstates. Indeed, there are indications that the Panama Canal was underutilized at the start of the peak shipping season with transits down 16.5% year over year in September.

While total toy imports to the two ports are surging, the same is not the case for all the large manufacturers. That may indicate a risk for Los Angeles and Long Beach that importers may be diverting to less heavily utilized ports.

Panjiva's data shows that imports to Los Angeles and Long Beach linked to Mattel Inc. fell by 14.7% year over year in the third quarter before dipping by a further 9.4% year over year in the first two months of the fourth quarter. Shipments associated with Hasbro Inc.. meanwhile. with a 25.3% slump in the past two months. Among the second tier importers, shipments linked to ThreeSixty Group Ltd., including the Sharper Image brand, surged 39.8% higher over the same period.

Eric Oak is a researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.