Logistics lags behind consumer demand ahead of holiday shopping | Business
Supply and labor shortages combined with congested delivery lines and rising shipping costs are creating an uncertain retail market ahead of the winter vacation shopping season.
Jimmy Chen of Bucknell University, an associate professor of analysis and operations management, said buyers placing orders this week for overseas-made products risked not receiving shipments until after the day of. Xmas.
Toys, clothing, electronics are all at risk.
âFor the general public, if we place an order now, it is probably too late. We can only rely on what retailers have on the shelves, âChen said.
Steve Patton, president of Watsontown Trucking Company, shared real-time shipping data for the ports of Los Angeles and Long Beach, where about 40% of containerized cargo enters the United States each year. More than 80 ships were anchored in San Pedro Bay waiting to be unloaded on Friday, nearly double the historic record of 41 set in March.
It would take about two weeks to clean the ports without the arrival of additional ships. It’s unlikely. Two dozen more ships were en route from East Asia, according to data shared by Patton.
According to the Washington Post, Walmart and Home Depot charter their own ships to collect their products. Amazon, the Post reports, is expanding its fleet of cargo planes.
Ocean shipments from China to the United States took an average of 73 days to reach final destination, 89% more than in September 2019, according to Freightos.com, an online freight marketplace. This is expected to increase as data shared by Patton estimated that freight out of Shanghai last Friday would take around 90 days to reach Indianapolis.
And then there is the cost of container transit. Estimates at Freightos.com estimate the average rate of a container shipment from Asia to the West Coast at $ 19,182, up 417% from 2020.
âI don’t think people really understand what happened. This supply chain problem happened when we reopened the economy and urged the workforce not to participate, âsaid Patton, referring to improved unemployment benefits. “We ordered new freight trailers last year and have yet to receive a new trailer this year.”
Seaport congestion is not a typical concern for consumers, Chen said, assuming the current situation could accelerate advances in workforce automation and other technological advancements.
âWe are now seeing the phenomena that this can create,â Chen said of bottlenecks in seaports.
Ports aren’t the only problem, of course. There are delays up and down the supply chain. Patton described it as a cascading effect.
âThe entire supply chain, especially for imported products, is in high demand,â Patton said.
COVID-19 outbreaks have closed manufacturing plants and shipping ports, including a major port in China this summer.
Dockworkers cannot keep pace with new arrivals of sea containers, leaving liners anchored longer. Cargo volume rose 30% at the ports of Long Beach and Los Angeles, where authorities have extended the hours to pick up and return containers, according to a joint statement from the ports.
Containers pile up at freight stations while waiting for truck drivers to transport materials to inland ports and distribution centers. This prevents the frames of specialized trucks from rotating to transport them, Patton said.
Truck driver and warehouse worker labor shortages are preventing goods from arriving as efficiently as they did before COVID at retailers and gateways. Walmart, Aldi, Amazon, and Dollar General are among the top retailers, each looking to hire tens of thousands of employees.
âNo matter how much wages increase, companies can’t find staff,â Chen said of the sign-up bonuses and higher hourly wages at many large retail chains.
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Only three other states employ more truck drivers than Pennsylvania. Sue Spry, associate vice president of academic affairs, Luzerne County Community College (LCCC), said the Commonwealth is still lagging behind.
According to Spry, 126 students completed LCCC’s CDL program for commercial trucking in fiscal year 2021. She said it was a modest amount. About 85% of successful CDL students are placed in jobs right out of school, she said.
âWe have a supply and a demand for students, but there are still not enough of us,â Spry said.
Logistics companies and distribution centers are turning in on themselves, focusing on employee retention and their training on forklifts, safety, supply chain management and leadership. The industry has also seen an increase in starting salaries and signing bonuses.
âThey don’t have enough pickers and packers, the very basic level. They just can’t find enough people, âSpry said.
“Everything comes and goes”
Two retailers in downtown Lewisburg spoke about how delivery delays impact their own businesses.
Connie Harter of Retrah said she typically receives most of her holiday merchandise in July. It’s just starting to ship.
Laurie Slear of The Mercantile said she traditionally ordered holiday items in February. This year was no different. What has changed is that instead of not requesting any shipments until October 1, Slear has requested that the goods be delivered as soon as they are available.
âWe are still short but everything comes and goes and comes and goes. It’s relentless and stressful, âSlear said.
Slear said she worried about ordering too many goods last year due to economic uncertainty. Now she’s hoping The Mercantile has enough inventory.
Harter said she was even having trouble getting shipments of personalized shopping bags for Retrah. She also has trouble keeping clothes in stock. It sells out quickly.
âWe’re just trying to get whatever we can and encourage people to buy now. We don’t know what’s going to happen between now and Christmas, âHarter said.