Retailers warn holiday shoppers of 'unique challenges' amid supply chain crisis and say to buy NOW - as cargo shippers say LA port's container fines starting Monday would be catastrophic
Retailers are imploring shoppers to get their Christmas orders in early as the nation grapples with historic congestion amid an unprecedented supply crisis.
And some shipping experts, including Mohawk Global Logistics executive Riche Roche, say the Los Angeles and Long Beach port plans to fine carriers for stranded empty containers at the dock could make things even worse.
‘As far as the ‘hyper-demurrage’ announced in Los Angeles/Long Beach, I think it will be catastrophic,’ Roche said during a National Shippers Advisory Council (NSAC) meeting Wednesday.
'Chassis are already in short supply and this will artificially suck out the rest of the containers that may be sitting in there that didn’t need to be on a chassis and now they’re going to be parked somewhere. It’s probably going to wipe out whatever’s left in terms of chassis,' he said, Freightwaves reported.
Meanwhile, Pottery Barn, Lands End, and L.L.Bean, are among some of the companies issuing shipping warnings to buyers, with less than two months to go before Christmas.
‘We’re facing some unique challenges this year,’ L.L.Bean said in a note to its customers posted online. ‘People have been getting outside in record numbers (and that’s great!), but high demand paired with extraordinary global events means we may not have some of the products you’re looking for right now.’
The warnings come as the LA and Long Beach ports – which move about 40 percent of shipped cargo entering the U.S. – struggle with an historic backlog that’s slowing the nation’s supply chain ahead of the holidays.
LL Bean, is among a number of companies issuing shipping warnings to buyers with less than two months to go before Christmas
Lands End said the global shipping shortage – combined with a deficit of workers and heightened demand - is delaying its products, too
Maine-based L.L.Bean said it’s working around the clock to get products to doorsteps.
The products are being stalled by an abundance of empty shipping containers that have been lingering at the ports for weeks, creating congestion and preventing new containers from being transported.
The Biden administration has come under fire for its 'too little, too late' response to the backlog after it announced West Coast shipping ports would be running around the clock to ease bottlenecks in the system.
The LA and Long Beach ports – which move about 40 percent of shipped cargo entering the U.S. – are struggling with an historic backlog that’s slowing the nation’s supply chain
Lands End is another company that says the global shipping shortage -combined with a deficit of workers and heightened demand - is delaying its products, too.
Hanna Andersson, the maker of organic pajamas for kids and adults, put out its own warning ahead of the holidays.
The company’s chief executive in an email that customers should order Christmas long johns by early November to avoid disappointment.
‘We urge you to order your holiday [pajamas] very early this year due to the continued Covid impact on our global supply chain—including factory and port closures, and major shipping and logistical challenges—that may cause delays in orders,’ Sally Pofcher said in the note.
Numerous items are already backordered into the new year because of the supply crisis.
Lego’s Heartlake City Hair Salon is backordered until January 7, while its Mars Research Shuttle set could be a close call with an estimated ship date of November 26.
Some items, including Lego's Heartlake City Hair Salon, are backordered into January
Upholstery delays at Pottery Barn mean some pieces won't be delivered until February
Kids' boutique Maisonette said the coronavirus has made this year's shipping protocols 'more complicated this year
Pottery Barn is experiencing upholstered furniture delays that is pushing the shipping date for some of its stuffed furniture back until late January.
Some of Crate and Barrel’s pieces – including dining tables and sideboards – will only be delivered in mid-March.
Hasbro executive said earlier this week that shipping backups delayed $100million in toy orders into the fourth-quarter.
Kids' boutique Maisonette also warned of shipping delays, and said the coronavirus has made this year's shipping protocols 'more complicated' this year.
‘In general, total transit times have nearly doubled across all lanes and on certain lanes. transit times are as much as 50 days longer compared to pre pandemic levels,’ Deborah Thomas, Hasbro’s chief financial officer, said during an investor call.
California’s San Pedro Bay ports are aiming to move 40 percent of stranded containers by Sunday, an executive said Wednesday.
‘Santa’s going to need a little extra help this year,’ Port of Long Beach chief operating officer Noel Hacegaba told DailyMail.com. ‘We recognize that 40 percent is a big number, and it will require an unprecedented, coordinated effort, but it must be done.’
There were 103 container ships in the LA and Long Beach ports on Wednesday
The ports recorded a record vessel backup on October 24, when 110 ships were at anchor
And starting Monday, LA and Long Beach port officials will start billing carriers who’ve left empty containers on the property for prolonged amounts of time.
The fees will apply to containers that are sitting on the terminal for six days or more for units moving by rail, and nine days or more for goods moving by truck.
Port of Long Beach Executive Director Mario Cordero said the fines are necessary to incentivize shippers to return their empties.
‘We need to take bold measures to address very serious situation,’ Cordero told reporters during a conference call Wednesday. ‘It’s a broad brush approach to deal with what we need to move in the San Pedro Bay complex.’
Port of Long Beach Executive Director Mario Cordero said 'bold measures' are needed
Starting Monday, LA and Long Beach port officials will start billing carriers who’ve left empty containers on the property for prolonged amounts of time
Cordero said it's imperative that everyone works together to relieve the logjam, even if it takes imposing fines.
‘Everybody's been impacted. We’re trying to lead on the issue. We have a directive that we have to address to move this cargo, and not everybody is going to be happy to how we do this,' he said.
‘I'm asking everybody to have that collaborative spirit to address a crisis that we have before us.’
Nathan Strang, Flexport’s director of ocean trade lane management, said fines are unlikely to solve the larger issue of empty container congestion at the ports
But some worry the financial disincentive will do little to alleviate the backlog.
‘We've seen storage bills on containers for 20,000 30,000 $40,000,’ Nathan Strang, Flexport’s director of ocean trade lane management, told DailyMail.com.
‘I don't know that another $100 On top of that is going to incentivize anyone to get their container.’
He said any extra cost is likely to ultimately get passed onto importers.
Motor Equipment and Manufacturing Association’s Steve Hughes also expressed skepticism about the strategy.
‘I’m concerned that this new fee is going to cause even more problems than it’s going to solve,' he said during the NSAC meeting.
‘I understand the logic behind it and it makes some sense, but unfortunately, because we don’t have the throughput at the front gate, I think this can cause us more problems than we have already.’
One shipping executive said the incoming fine system for empties would be a 'catastrophe'
No comments