Nov 05, 2021

Port Congestion Update (Part 5): Supply Chain Issues Disrupt the 2021 Holiday Shopping Season

west coast port congestion image

How Will the Fractured Worldwide Supply Chain Dampen Gift-Giving this Holiday Season?

In our ongoing blog series about coastal port congestion, we breakdown the various issues causing this crisis and the impact being felt across the supply chain. In our last post, part 4, we explained the critical role truck drivers play in the supply chain, as well as several factors contributing to driver shortages. In part 5, we discuss how supply chain issues will affect most businesses, consumers, and ultimately holiday gift-giving this year.

The Current Situation
Amidst the worldwide supply chain disruption, container ships remain unloaded and an increasing number of ships having to wait to enter ports is causing a growing bottleneck. The current estimated waiting time for ships to dock at port is about 10 days. Once they arrive at port and are unloaded, a majority of the containers will sit at the port for more than a week before someone can take them on the next leg of their journey. The result is massively delayed shipments for businesses waiting to receive inventory, manufacturers waiting to receive parts, and consumers waiting to receive goods leading to shortages that ultimately are further driving demand. However, jammed ports, shipment delays, surging demand, and a lack of truck drivers are only part of the current logistics nightmare.

Panicked retailers and manufacturers are over-ordering and placing orders too early, which compounds the supply chain problems and makes the crisis even worse. Overstocking creates smaller demand at the retail level but puts an even larger demand on wholesalers, distributors, and manufacturers. Orders placed early for raw materials, parts, and finished goods are lengthening the line, with raw materials suppliers feeling the most impact.

What to Expect from the Compounding Mess
Consumers and retailers alike face serious challenges this holiday season:

  • Higher prices for consumers as businesses offset increased freight and commodities costs
  • Fewer choices for consumers as retailers cannot keep shelves stocked
  • Potentially four-to-six-week shipping delays for online shopping
  • Missed sales for retailers on account of low inventory
  • Staffing shortages for retailers resulting in limited store hours and increased labor costs
  • Lower-than-expected holiday sales for small retailers, who often count on 40% or more of their annual revenue from the holiday season
  • Financial instability leading into 2022

We are seeing price increases at the manufacturer and retailer levels because every step in the transportation system is costing companies so much more. Steve Pasierb, President and Chief Executive of The Toy AssociationWe are seeing price increases at the manufacturer and retailer levels because every step in the transportation system is costing companies so much more. Steve Pasierb, President and Chief Executive of The Toy Association Source

Creative Ways Businesses Are Pivoting and Adapting
To combat shipping delays and meet order demands, some businesses are rerouting to less congested ports with the hope of unloading more quickly and ultimately shortening delivery times. Others are using alternate transportation, such as airlines and railways, in order to avoid overcrowded ports. And some are manufacturing goods using different, more readily available materials.

Retailers are advertising holiday items earlier this year. Promotions have already begun much sooner than the traditional day after Thanksgiving. In addition, they are encouraging shopping early this year to snag gifts before they’re sold out. Many retailers won’t get more shipments before the end of the year.

Is There Any Relief Following the Holiday Season?
You may wonder if there’s any relief coming after the holiday season. Experts predict supply and consumer goods shortages will last through 2022 and possibly even longer.

According to News@Northeastern, Nada Sanders, a professor of supply chain management at Northeastern University, says “We are going to see restructuring of global supply chains in different ways, but that isn’t going to play out until 2023.”

How EASE Can Handle Logistics Even During a Supply Chain Crisis
While ports, warehouses, and delivery companies have extended their hours to operate around the clock in an effort to try to catch up, we never turn the lights off at EASE. Our unparalleled customer service model ensures you have access 24/7/365 to a team member who can assist with any shipping demand you have, at any time of day. We’re equipped to handle every supply chain need—including temperature-controlled and time-sensitive shipments with our extensive, strategic network of highly vetted transportation and logistics partners. EASE has a track record of delivering proven results — especially in times of crisis. We are a trusted partner who can help you get through the holiday season and the growing supply chain crisis. If you have a supply chain need that can’t wait, contact us at 614-553-7007 or email info@easelogistics.com.

In our next installment of this series, we’ll share our findings on the outlook of the supply chain in 2022. In the meantime, catch up on the series by reading part 1, part 2, part 3 and part 4 to learn more.

Contact us today for innovative solutions to your transportation needs.