How Will Holiday Shopping Be Affected By Blocked Ports?
The pandemic is haunting the global supply chain and shoppers.
With the peak of the holiday shopping season coming up, buyers are encountering empty store shelves, rising prices and shipping delays that seem to stretch into oblivion. Container ships are clogging ports, awaiting cargo or unable to get past the gridlock to unload their goods. Some factories have even gone out of business, lacking raw materials and hands to run machines.
A growing number of shipments are stuck at sea because of supply chain issues, leading to growing concern that holiday shipments may not arrive in time. Container ships are crowding ports from New York to Los Angeles, where 250,000 containers are floating off the coast waiting to be unloaded.
Holiday shoppers are beginning to worry because a third of the more than 5,700 people recently surveyed by Oracle, which provides cloud services for many large retailers such as Prada and Office Depot, worry that they won’t get everything on their wish lists and if they do, they will end up paying more than intended.
The coronavirus pandemic has been wreaking havoc on global supply chains since it began nearly two years ago, causing suppliers and retailers many challenges along the way with trying to keep the virus out of offices and factories, navigating shutdowns and business restrictions.
Larger companies, including Walmart, have chartered entire ships to deliver goods to less congested ports. The tremendous cost makes it out of reach for small businesses.
Then there’s the steady rise of raw materials prices and skyrocketing shipping costs. The nation is also experiencing difficulties such as being short on truck drivers and warehouse workers.
“There’s no room to put this cargo. Our docks are full. People need to come and pick up their cargo,” said Gene Seroka, executive director of the Port of Los Angeles. “Only half the truck drivers registered to do business here visit us at least once a week. We need more drivers on the job.”
Since materials are starting to cost more, buyers are starting to have to pay more. Problems have been compounded by a labor shortage that has intensified in recent months, as more warehouse and retail workers become part of “The Great Resignation”. This is a phenomenon driven by pandemic burnout and reassessment of life and work.
According to the Labor Department, data shows that a record 4.3 million Americans quit their jobs in August and big box stores and local retailers are struggling to fill positions and store shelves.
Demand is on the rise and retail sales have risen unexpectedly the past few months despite a resurgence in coronavirus cases brought on by the delta variant, which had a big effect on business activity.
Industry leaders say shoppers should consider getting their holiday gifts early this year as ongoing congestion at the ports of Los Angeles and Long Beach could impact supply over the next few months.
Some people even anticipate the problem will lead to products simply not being available as the holiday shopping season ramps up. In some cases, some shipping delays will likely lead to customers not receiving gifts purchased online until early 2022.