America’s National Retail Federation (NRF) yesterday asked president Joe Biden to step in and help fix port congestion as retailers face up to the trickiest peak season in living memory.
“The supply chain disruption issues, especially the congestion affecting our key maritime ports, are causing significant challenges for America’s retailers,” NRF president and CEO Matthew Shay wrote in a letter to the White House. “The congestion issues have not only added days and weeks to our supply chains but have led to inventory shortages impacting our ability to serve our customers. In addition, these delays have added significant transportation and warehousing costs for retailers.”
70% of US retailers have had to add 2 to 3 weeks to their supply chains because of congestion issues
Shay suggested that as the Biden administration undergoes supply chain reviews for critical sectors, including transportation, addressing the current state of America’s nation’s ports and freight movement must be a critical component of the strategy.
The White House announced last week the creation of a Supply Chain Disruptions Task Force. Led by the secretaries of commerce, transportation and agriculture, the task force would bring together stakeholders “to diagnose problems and surface solutions – large and small, public or private – that could help alleviate bottlenecks and supply constraints”.
The NRF revealed yesterday a recent survey of member companies found that 97% of retailers indicated they have been impacted by port and shipping delays. More than two-thirds said they had to add two to three weeks to their supply chains because of the congestion issues, something that is likely to be exacerbated in the coming weeks as US supply chains grapple with the chaos created by a Covid-19 outbreak at key export ports in south China. Latest satellite tracking data shows there are now very close to 100 boxships anchored off southern China waiting for berth spaces to become available, up from 15 vessels a month ago.
The enormous strains felt by retailers in the US, struggling to get stock on their shelves, took an extraordinary turn in recent days with one of the biggest names on the American high street deciding to take matters into its own hands.
Home Depot, the largest home improvement retailer in the US, has chartered in a boxship to move its own goods.
The Home Depot shipping news has been creating headlines across industry media. Analysts contacted by Splash suggested the move by the retail giant was more about getting a message across to transport partners rather than pushing ahead with its own standalone transport plans given that Home Depot had taken just one ship, meaning monthly sailings at best.
“Maybe this is more of a symbolic move to let carriers know we are prepared to do this if you don’t offer reasonable rates rather sooner than later,” one analyst suggested in conversation with Splash.