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Retailers like Levi and Costco plan to shift routes, use

air

freight to avoid delays

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Newell Brands ( NWL ) offers to boost production to mitigate

supply

chain disruptions

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Toy companies rely more on West Coast ports

By Savyata Mishra, Jessica DiNapoli

Oct 3 (Reuters) - Major retailers from Levi Strauss

to Costco are preparing alternative shipping

plans to ensure goods arrive in time for the peak holiday season

as the U.S. East Coast and Gulf Coast ports strike drags on.

Long lines of container ships queued up outside major U.S. ports

on Thursday as the biggest dockworker strike in nearly half a

century entered its third day, preventing unloading and

threatening shortages of everything from bananas to auto parts.

Retailers account for about half of all container shipping

volume, with Walmart ( WMT ), IKEA, and Home Depot ( HD ) among

those that heavily rely on the East Coast and Gulf Coast ports,

according to eMarketer analyst Sky Canaves.

Denim maker Levi, which gets most of its products into the

United States through the East Coast from Asia, said it had made

alternate plans, such as shifting routes to the U.S. West Coast,

prioritizing certain ports and using air freight.

Levi is not alone in this strategy. Costco had contingency plans

in place including pre-shipping some products to get in holiday

goods early and preparing to use different ports, it said last

week.

Newell Brands ( NWL ), which makes cleaning equipment like

Rubbermaid mops, garbage cans and buckets, contacted retailers

like Walmart ( WMT ) and Lowe's this week offering to step up

production if necessary, said CEO Chris Peterson in an interview

Wednesday. Atlanta-based Newell manufactures most Rubbermaid

products domestically, while competitors may get held up at

ports, Peterson said.

He said the retailers "will let us know if they need us to

surge in and help." The manufacturer in the short-term could

boost production of some goods by 50%, Peterson said.

"We have safety stock built up," he said.

In the medium and longer term, the company could increase

capacity by about 20%, he said.

SUPPLY CHAIN CHALLENGES

Coffee is among the goods arriving to the United States

through the East Coast ports, with shipments already disrupted

and prices rising.

Folgers coffee maker J.M. Smucker said it had

strategies in place to address potential supply chain challenges

such as confirming the amount of inventory it already has that

is available to ship to retailers, adjusting production plans to

maximize manufacturing finished goods and evaluating re-routing

shipments to the West Coast.

"If the strike lingers, it will be difficult for retailers

to form a plan B without fear of being stuck with excess

inventory once the strike ends," said Michael Ashley Schulman,

chief investment officer at Running Point Capital Advisors.

"Depending on how long the strike lasts, many retailers and

auto lots may reduce holiday sales events because they won't

have enough goods available," he added.

Toy makers Mattel ( MAT ) and Hasbro ( HAS ) have limited

exposure as they get most of their supplies from China via the

West Coast ports, especially Los Angeles, said Linda Bolton

Weiser of D.A. Davidson.

Walmart ( WMT ), the world's largest retailer by sales, has

said it was prepared for unforeseen disruptions in its supply

chain and has maintained additional sources of supply to ensure

it has key products available.

Some consumers have been buying extra paper products such as

toilet paper and paper towels, according to local media reports,

fearing shortages. Most paper products are manufactured

domestically, however.

Nakia, an associate at Target ( TGT ) in Manhattan who

declined to give her last name, said that she has noticed

shoppers picking up extra paper towels, tissues and canned food.

The store shelves were fully stocked.

Conagra Brands ( CAG ) CEO Sean Connolly said he expects the

company to be able to manage through any disruptions without any

significant impact as it had worked with suppliers in advance.

"A modest strike would not result in significant increases

in cost or in-transit times, as we've been pulling forward

volumes throughout the summer and we've received our holiday

inventory," a Tapestry spokesperson told Reuters.

Home Depot ( HD ) said it was closely assessing the situation,

similar to Nike ( NKE ), which also said the strikes were a

possible risk. Birkenstock ( BIRK ) declined to comment while

Best Buy ( BBY ), Target ( TGT ) and the dollar chains did not

immediately respond to requests for comment.