FedEx CEO: Port Slowdown To Hurt Retailers' Q4

Fourth-quarter results from retailers could be at risk from bottlenecks and labor strife at West Coast ports, according to an executive in the package shipping industry.

FedEx Corporation (NYSE: FDX) Chief Executive Frederick W. Smith called the issue an under-reported "big deal."

"I suspect you're going to hear a lot more about in January when the retailers start putting their results out," Smith told analysts Wednesday.

A "tremendous amount of inventory was simply not put through the ports in the time frame retailers had expected," according to Smith, who deflected blame for FedEx's recent earnings report that came in below expectations.

Ports in Long Beach and San Diego, California, and in Washington state have been plagued by facilities shortages and recent labor slowdowns.

Port managers said Wednesday that union slowdowns continue to disrupt the movement of cargo while worker and management negotiators remain "far apart" in efforts to write a new contract.

The International Longshore and Warehouse Union has blamed port bottlenecks on shortages of port equipment as well as a lack of rail cars and truck drivers.

Regardless of the cause, "it slowed down a lot of the retailing activity in late November and early December and led to a lot of 'not in stock,'" Smith said.