Logistics lags behind consumer demand before Christmas shopping | Companies

Shortages in supplies and manpower combined with congested delivery lines and rising shipping costs make for an unsafe retail market ahead of the winter holidays.

Bucknell University associate professor of analytics and operations management, Jimmy Chen, said shoppers placing orders for overseas-made products this week risk receiving deliveries after Christmas Day.

Toys, clothing, electronics are all at risk.

“It is probably too late for the general consumer to place an order now. We can only rely on what retailers have on their shelves, ”said Chen.

Steve Patton, President of Watsontown Trucking Company, shared real-time shipping data for the ports of Los Angeles and Long Beach, where approximately 40% of container freight enters the US annually. More than 80 ships were anchored in San Pedro Bay waiting to be unloaded on Friday, almost double the all-time record set in March of 41.

It would take about two weeks to clear the ports without additional ships arriving. It is hardly likely. Two dozen other ships were sailing from East Asia, according to Patton.

According to The Washington Post, Walmart and Home Depot are chartering their own ships to retrieve their products. Amazon, the Post reports, is expanding its fleet of cargo planes.

According to Freightos.com, an online freight marketplace, sea shipments from China to the US took an average of 73 days to reach the final destination, 89% longer than it was in September 2019. That will increase as the data shared by Patton estimates that it is estimated that it will take 90 days for cargo, which departed Shanghai last Friday, to reach Indianapolis.

And then there are the costs of container transit. Freightos.com estimates the average rate of container shipments from Asia to the West Coast at $ 19,182 – 417% higher than in 2020.

“I don’t think people really understand what happened. This supply chain problem arose when we reopened the economy and encouraged workers not to get involved, “Patton said, referring to the improved unemployment benefits. “We ordered new freight trailers last year and haven’t received a new trailer this year.”

Seaport congestion is not a common problem for consumers, Chen said.

“We are now seeing the phenomena that can arise from this,” said Chen of bottlenecks in seaports.

Cascade effect

The ports aren’t the only problem, of course. There are delays along the supply chain. Patton described it as a cascading effect.

“The entire supply chain, especially for imported products, is heavily burdened,” said Patton.

COVID-19 outbreaks have closed manufacturing facilities and shipping ports, including a major port in China this summer.

The dock workers cannot keep up with the new arrivals of shipping containers, so the cargo ships are anchored longer. Cargo volumes have increased by 30% in the ports of Long Beach and Los Angeles, where officials have extended opening hours for container pickup and drop-offs, according to a joint statement from the ports.

The containers pile up in freight yards and wait for truck drivers to transport material to inland ports and distribution centers. That prevents the sale of specialized truck chassis to transport them, Patton said.

The labor shortage among truckers and warehouse workers is preventing goods from arriving at retailers and front doors as efficiently as it was before COVID-19. Walmart, Aldi, Amazon, and Dollar General are among the major retailers who each plan to hire tens of thousands of employees.

“No matter how much wages go up, companies won’t find people,” said Chen of the bonus payments and higher hourly wages at many large retail chains.

Job offers

Only three other states employ more truck drivers than Pennsylvania. Sue Spry, assistant vice president of academic affairs for Lucerne County Community College (LCCC), said the Commonwealth is still falling short.

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.

“We have a supply and a demand for students, but we still don’t come out enough,” said Spry.

Logistics companies and distribution centers are turning inward, focusing on employee retention and training in forklift, safety, supply chain management and leadership. The industry has also seen a surge in higher entry-level wages and bonuses.

“You can’t get enough pickers and packers, the very simple level. You just can’t find enough people, ”said Spry.

“Everything comes and comes”

Two retailers in downtown Lewisburg talked about how the shipping delays are affecting their own business.

Retrah’s Connie Harter said she usually gets the bulk of her Christmas items by July. Shipping is just beginning.

Laurie Slear of The Mercantile said she traditionally orders Christmas items in February. This year was no different. What has changed is that Slear did not require deliveries before October 1st, that the goods be delivered as soon as they are available.

“We’re still small, but everything comes and comes and comes and comes. It’s relentless and stressful, ”said Slear.

Slear said she was concerned last year about ordering too many goods in the face of economic uncertainty. Now she’s hoping The Mercantile will have enough inventory.

Harter said she was struggling to get deliveries of custom tote bags for Retrah. She also struggles to keep clothes in stock. It sells out quickly.

“We’re just trying to get what we can and we encourage people to buy now. We don’t know what will happen until Christmas, ”said Harter.

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