General

Due to serious delays in the supply chain caused by port congestion, US retail importers have pre-booked seasonal goods for the end of the year. The logistics company also recommends that the shipper deliver the goods as soon as possible, as the peak transportation season has arrived earlier.

Brian Bourke, Chief Growth Officer of SEKO Logistics, said: “Shippers have a variety of options, they can charter their own ships or air freight, but the current situation is that shippers need to arrange bookings as early as possible, otherwise they will miss Christmas.”

In order to analyze the impact of congestion, the global trade database ImportGenius analyzed the import data of Wal-Mart’s commodity this summer, the above-ground swimming pool, to assess the severity of congestion in the supply chain. Wal-Mart uses a wide range of ports and has hundreds of distribution centers.

Bill Simon, former CEO of Walmart, said: "One of the most important conditions for an effective supply chain is the ability to flexibly adjust the supply chain system to deal with potential disruptions. This is why Walmart's delivery is world-class, because They have the ability to adjust and flexibly change the transportation route from the port of origin to the store."

Simon said that Wal-Mart’s summer products usually arrive at the port from January to March. After that, the products will be shipped to the distribution center and stored there. These products will be on the shelves in April or May. That is, the transportation time of goods is generally concentrated in January to April.

The following chart shows the month of Wal-Mart’s above-ground swimming pool shipments. Compared with the previous two years, the shipments in 2021 are concentrated in March-May. In particular, the shipments in May were the largest, which was obviously delayed than usual. .

According to U.S. customs data collected by ImportGenius, Wal-Mart received more than 18,000 above-ground swimming pools between March and July, of which 1,131 14-foot-tall swimming pools were not processed by customs until June 20.

ImportGenius analyst William George explained: "This delay may be caused by the congestion caused by the shutdown of Yantian Port." Simon said: "These swimming pools are so late that it is most likely caused by production or transportation delays."

Unfortunately, large-scale port delays are just one of the many supply chain disruptions that shippers face.

Alan Baer, President of OL USA, said: "Traditionally, we usually complete the shipment from China to the US Midwest distribution center within 25 to 28 days. Now, the same shipment may take 50 to 70 days, and the delivery time is the original Double or even triple, which is unfortunate for importers. For ordinary importers who have fixed windows to sell products, the extended shipping time will cost extra."

Baer added: “The advantage of Wal-Mart over other competitors lies in its scale. Even if the above-ground pool arrives late, Wal-Mart has the ability to deliver these goods to stores in the south. But for small sellers who are also late to receive the goods, They don’t have this ability. Once a suitable sale time has passed, they can only sell the products at a discount."

C.H. Robinson, the largest non-vessel importer from China to the United States, said that the peak shipping season started very early.

Noah Hoffman, CHRobinson's retail expert and vice president of North American water and land transportation, explained: "Since April, we have been at the peak of the peak season for U.S. retailers. At that time, some of our 7,500 retail customers had already begun to place orders. To ease the shipment delays of Asian manufacturers."

Hoffman said that currently the 25 largest retailers in the United States are preparing inventories in advance and have ordered more goods than normal, hoping that at least a small part of the goods will arrive before the end of the peak season.

A FedEx representative said: "In June of this year, the peak shipping season began to heat up, about two months earlier than usual. More and more US retail importers have advanced their scheduled orders and factory production by six to eight weeks. "

SEKO logistics company sent a proposal to customers, urging shippers in the Midwest and East Coast to start shipping before August 21, so that they can be on the shelves before November 1.

SEKO'S Bourke said: “We shared the key date to make them realize that the time for shipments in the United States and Europe at Christmas is running out. From a shipping perspective, this date is three to three times earlier than normal market expectations. Four weeks, from the perspective of inventory reservations, it was about eight weeks in advance."

SEKO is not the only company that is cautious. Jon Monroe of Monroe Consulting also reminded in an e-mail to customers that the situation encountered by some cargo owners during Christmas in January may repeat itself.

He said: "The total transit time of some companies' imported goods (until the goods arrive at the warehouse) exceeds 100 days. This sounds extreme, but it doesn't. Take a look at the order and calculate the amount of time required from the stocking date to the distribution center date. time."

"We need to spend a few weeks to book, a few weeks to board the ship, and a few weeks to wait for the berth to arrive at the pier. If it is a multimodal transport inland, it may take several weeks for the goods to reach their destination. If The destination is Chicago, so it will take a few weeks to get the goods out of the dock."

The National Retail Federation (NFR) conducted a benchmark survey in June, asking members about continued congestion in the supply chain and peak seasons.

"Most members said that their supply chain has been extended for more than three weeks." "More than 70% of the respondents said that they will advance the peak shipping season to July, August and September, of which August may be The busiest month.” said Jon Gold, NRF's vice president of supply chain and customs policy.

"We need to find a more flexible solution for the supply chain in a short time. The port congestion problem we face is systemic and existed before the epidemic."