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- Overwhelmed U.S. ports, elevated freight costs and accidents that sent goods plunging to the bottom of the ocean are causing headaches for U.S. retailers.
- Retailers expect the problems to spill into the next quarter, though some say they think the worst is behind them.A recent Bloomberg Quint news by Kim Bhasin, Jordan Holman and Gufeng Ren reveal that U.S retailers are having a tough time due to delay in shipping and rising prices.
From appliance makers to shoe brands
From appliance makers to shoe brands and fitness equipment manufacturers, corporations of all sizes are reporting logistics struggles, especially on trans-Pacific trade routes.
Although they haven’t yet translated into widespread sticker shock for consumers, the ongoing shipping issues threaten to disrupt inventories if they persist much longer.
“I don’t think we’re meeting everybody’s expectations today — and frankly, we’re unlikely to. I doubt if anybody else is either importing products from Asia,” Crocs Inc. Chief Executive Officer Andrew Rees said on an earnings call this week.
“Getting it through Long Beach and other ports, getting shipped to customers is really challenging right now. And that’s not an issue with production capacity; that’s just logistics.”
What does the research say?
According to a paper published Friday by Julianne Dunn, an economic analyst at the Federal Reserve Bank of Cleveland, “it is likely that supply chain disruptions will continue to evolve for the foreseeable future.”
In the meantime, some companies are paying premiums to send goods by air, substituting products on shelves and trying to renegotiate arrangements with shippers.
Steven Madden is shipping some goods by air but is “judicious” about the move, CEO Edward Rosenfeld said, because the cost of air freight is also up over 100% compared with a year ago.
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Source: Bloomberg Quint
