(FORTUNE Magazine) – It's two hours before quitting time, and Mickey Main's cellphone won't stop ringing. His longshoremen, the unionized dockworkers who staff Los Angeles and Long Beach's seaports, don't let up. Some are angry they have to work overtime; others believe a shipping line is breaking union rules. Each call requires a visit and each visit requires time.

It doesn't look like it as the 50-year-old mechanic rumbles around these smog-infested ports, which together are the size of Manhattan, but

Main may have one of the most critical jobs in America's globalized economy. When just a few dockworkers stop moving cargo --even for an hour or so--the flow of goods from China's factories to neighborhood retailers to your Christmas tree grinds to a halt. The Los Angeles--Long Beach ports handle 43% of America's imports. It is Main's job to drive around them all day, in a black Chevy Suburban with ILWU BUSINESS AGENT inscribed on the side, representing the longshoremen, settling arguments, and keeping the freight moving. "I'm the sheriff for as far as the eye can see," Main says with a smile.

He could sure use some deputies. With the boom in imports from Asia, this place is out of control. Just over a month ago some 94 cargo ships--a flotilla bigger than most of the world's navies--were waiting to be unloaded (43 couldn't even fit in the harbor). And some of the ships lucky enough to find a dock spent as many as eight days unloading, twice as long as normal.

It's hard to overstate the ripple effects of the chaos. Just ask Toys "R" Us, which had to build ten extra days into its supply chain; or Sharp Electronics, which had to fly in television parts from China; or toymaker MGA Entertainment, which lost some $40 million in revenues when it couldn't deliver its bestselling Bratz dolls on time to big retailers. Sharper Image even blamed a third-quarter loss in part on reduced inventory from the port backlog. It also cited higher air-freight costs to bypass ports.

The sheer volume of cargo this year has caused problems rivaling the eight-day dockworkers lockout in 2002, which shut down the West Coast ports entirely. This fall the problems were more complex, and more intractable. The railways couldn't take more cargo, the union was short of skilled workers, and truck drivers were quitting right and left. And yes, as with most American economic stories, Wal-Mart played its part. It imported a record amount of goods in just a few months this fall, the peak shipping period of the year. While the situation has improved in the past few weeks, many of the 40- by eight-foot, 22-ton containers are still sitting stacked five high and ten across on the docks. Getting them out is like driving in Calcutta during rush hour. Trucks whiz by the five-mph speed-limit signs, cranes the size of small skyscrapers move between ships--oh, and yes, there are the forklifts. Everywhere.

The chaos doesn't mean that Americans will be shopping at stores with empty shelves this holiday season, but as manufacturing jobs continue to be outsourced, the capacity of the nation's ports, roads, and rail system is nearing a true breaking point. When container rail service between Los Angeles and Chicago began in 1968, the trip took 36 hours. Now it's closer to 56. Why? Too many trains and not enough tracks. This year port volume increased about 12%, three times what had been expected. With other West Coast ports ill-equipped to handle big ships--some new freighters hold more than 4,000 containers each--Los Angeles--Long Beach, the largest U.S. container complex, has to bear the brunt. And many of the ships coming from Asia are too big to make it through the Panama Canal to Eastern seaports, so the ships come here in droves, and wait ... and wait. The two ports combined process 24,000 containers a day, handling 62% of all shipments to West Coast ports from Asian exporters.

So when things go wrong at this magnitude--costing the economy billions, though there are no solid estimates yet--no one wants the blame. The dockworkers' union, the railroads, and the Pacific Maritime Association, which represents shipping lines and port operators, point fingers at each other. David Arian, president of International Longshore and Warehouse Union Local 13, said the current backlog could have been avoided had the PMA hired more full-time union workers instead of relying on a limited number of inexperienced temps known as "casuals." For his part, PMA president Jim McKenna admits underestimating the labor demands but blames the union for exaggerating the problem to boost its membership. He says adding full-time workers would do nothing more than change the status of those already on the job without increasing productivity. Both of them blame the railroads for starting the whole mess by being short on locomotives, workers, and container cars.

John Bromley, director of public relations at Union Pacific, had a short answer when asked if the railroad had anticipated the current volume of cargo. "No," he said. Matt Igoe, the Los Angeles senior hub manager of the Burlington Northern and Santa Fe Railway, says it wasn't his fault everyone dumped a lot of containers on his system all at once. But he admits that in less than two years, his rails will be at true capacity. And what to do then? "I'm only worried about this afternoon," he responded.

It's a logistical nightmare many smaller importers didn't consider when they outsourced manufacturing abroad. Take K.C. McCarthy, the supply-chain manager of Topco Sales, a cosmetics company. He thought he would be saving substantial sums of money by manufacturing his goods in China this year, but instead he's had to get some of his products out of Los Angeles on planes to get them to retailers like Target and Wal-Mart on time. (If he misses a deadline, he can suffer fines called chargebacks or, worse, lose his contract altogether.) The cost differences are staggering. A 40-foot container costs about $900 to ship from Los Angeles to Houston by train, according to Belle Morales of Dynalink Systems, a Los Angeles--based customs broker and freight forwarder. Putting that same "can" on a truck raises the price to more than $4,000. Air freight for 22 tons of cargo? Try about $40,000. There go your profits and then some. "The big guys don't care," Morales says. "They say 'get it here or else.' "

And next year will be worse, experts agree. Many shipping companies and importers say they'll simply avoid Los Angeles--Long Beach as best as they can. Gap, for example, redirected some shipments to Seattle and Oakland, and some through the Panama Canal to the East Coast, when the gridlock set in. (About 100 ships went to other ports this year, the first year anyone needed to track diversions.) Other importers say they're just going to have to spend the extra cash to warehouse the goods here earlier in the season. As for what to do with the Los Angeles area, some say moving cargo out of terminals to an inland port by shuttle train may reduce traffic. Others bank on having the ports' gates open around the clock, as opposed to the current 8 A.M. to 5 P.M. schedule. (Ships are unloaded through the night, but trucks don't move in and out.)

Truck drivers complain that even if the gates were open 24/7, the warehouses where they deliver the containers are generally closed after hours. And they have other problems. Their profit is whatever is left after lease, insurance, gas, registration, and maintenance costs. But many have to wait in line for up to seven hours to pick up loads, destroying their ability to earn a living. An informal survey by the Marine Exchange of Southern California, which tracks port movements, found that hundreds of truck drivers had thrown in the towel. Veteran trucker David Macias, 49, is one of them. Now he hauls only cross-country. "Dealing with the port is a whole lot of stress for not a whole lot of money," he says. "The only problem now is I never see my wife anymore because I'm always on the road."

Macias is right--the port is a stressful, chaotic place. And while importers and retailers are feeling the pain of its antiquated infrastructure, there has never been a better time to be in the shipping business--or to be a dockworker. When the union put out a call for more workers, some 500,000 people applied. Why? The jobs pay $100,000 or more a year, with great benefits, vacation time, and flexible hours. Just spend an evening in the dispatch hall of Local 13. Workers of all ages, races, and sexes clamor to be assigned work as a carpenter, jitney driver, winchman,"swamper" (trucker's assistant), or crane operator. When the night dispatch starts, at precisely 4:40 P.M., it turns into an auction house. Ten dispatchers yell out jobs; who gets them depends on seniority and hours worked. Alex Lomeli, 36, has been a longshoreman for the past eight years. So have his father, grandfather, brother, uncle, and cousins. "I love my job," he says. "It's been real busy, though. This isn't just a peak period, it's the future." He's in the right business at the right time.

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