Companies look to skies to avoid port uncertainty. (Up Front).

Manufacturers trying to get foreign-produced goods to U.S. shores during the all-important holiday shipping season are finding a way around the uncertainty caused by fragile union negotiations at West Coast seaports -- the skies.

Several L.A. companies have been using air freight to get their goods to retailers as the crucial shipping season comes to a head. Manufacturers say the method is more reliable as work slowdowns or even a strike remain possible at the ports of Los Angeles and Long Beach.

But it's also more expensive than moving cargo by boats, and manufacturers must absorb the higher charges after already agreeing to deliver goods to retailers at a certain price.

"This summer we got a false impression that negotiations between the union and the shipping lines were going well. So we put our goods on boats' said Lonnie Kane, president of Karen Kane Inc., a Vernon-based women's wear manufacturer that sells to Nordstrom, Bloomingdale's and Macy's. "Now we are looking at mostly all air. I don't know what else to do." The majority of Kane's apparel is manufactured in Asia.

Talks between the Pacific Martime Association, which represents shipping lines at the ports, and the International Longshore and Warehouse Union, were suspended last Wednesday.

PMA officials said they expect to get back to the negotiating table on Monday (30th), while the ILWU said it wasn't sure when they will return.

The on-again-off-again talks stalled over how much new technology will be used to do some of the union workers' jobs.

The ILWU said it has been discussing technology for weeks and made no progress. "The PMA has made no effort to address our concerns, which is largely the issue of outsourcing our jobs to technology," said ILWU spokesman Jeremy Prillwitz.

The union, meanwhile, wants to start talking about safety, pension and wages.

Contingency plans

Executives at John Paul Richard Inc., a women's wear manufacturer in Agoura Hills, started shipping most of their goods by air in late July. "We had a lot of goods in the works and started airing them as a contingency plan," said Ed Redding, John Paul Richard's executive vice president in charge of importing and sourcing. "It's costly and normally adds $1 to the cost of each garment."

With so many manufacturers opting to fly in their goods, air freight costs are mounting. "Prices are now double what they were six months ago, which means on average it is adding $2 to the cost of a garment," Redding said.

John Paul Richard is paying hundreds of thousands of dollars extra every month. Its air freight costs can't be passed on to retailers who already have signed a contract for goods at a specific price.

Retailers and manufacturers are more concerned about a work slowdown than a strike. Two weeks ago, shipping companies accused the union of slowing operations, a charge the ILWU denied.

"The feeling is that if there is a strike, the White House would step in and invoke the Taft-Hartley Act, which would impose a 90-day cooling off period," said Carol Sanger, a spokeswoman for Federated Department Stores Inc., parent of Macy's and Bloomingdale's. "The bigger issue is a slowdown, and that is more difficult to counter."

Retailers and manufacturers spent much of the summer making contingency plans to assure delivery for the important holiday season, which can account for as much as 50 percent of a company's annual revenues.

Holiday delivery

Normally, holiday goods start arriving by ship from August to the end of October. Federated Department Stores started taking deliveries of holiday items early in August.

That was seen at the Port of Los Angeles, where incoming container traffic jumped nearly 30 percent in August over the like period a year ago. Figures haven't been tabulated for September.

Offloading containers at the Port of Long Beach was up 6 percent during August over the like period in 2001.

This summer, Vera Campbell, president of a medium-size L.A. apparel company called Knit Works, was in daily contact with her manufacturers in China to speed up production because a port strike was looming.

"Most of our goods were in by late August," said Campbell. "We might have a few stragglers that are still coming in through the port, but I think we'll be OK."

At Sport Chalet Inc., a sporting-goods chain based in La Canada Flintridge, executives decided to take early delivery of some of their hot sellers like fitness merchandise and game boards -- items that will be advertised for the holiday season. "We started looking into this three months ago when we heard there was a possibility of a strike," said Craig Levra, president and chief executive of the 26-store chain. "We're confident the vendors will deliver the rest of the goods on time."

Department stores have seen same store sales dip as much as 3 percent to 6 percent every month over last year, so they're more than eager to cancel late orders in order not to build up too much inventory.

Air cargo is always the transportation of choice for hot-selling toys quickly grabbed off the shelves towards the end of the holiday season. At that point, retailers will absorb the higher air shipment costs. "People are willing to pay more for a popular toy when there aren't that many," said Jack Woo, co-owner of ABC Toys, a Los Angeles importer.