Clogged shipping ports threaten holiday sales

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The traffic in Los Angeles these days is not just on the roads, it’s in the water.

Cargo ship after cargo ship wait to come to port as supply chain snags due to the health crisis have upended the ocean shipping industry… which moves roughly 90% of the world’s goods.

Gene Seroka is Executive Director of the Port of Los Angeles.

“The quickest route from Asia to the United States and interior points is through Los Angeles. And that’s what everyone is trying to maximize at this point in time. But it’s like taking ten lanes of freeway traffic and squeezing them into five.”

The ripple effect of parts shortages and displaced workers – from truck drivers to dock hands – has created an exasperating global supply crunch, making it difficult for retailers to keep stores and online fulfillment centers stocked and putting holiday sales that make or break company profits in peril.

Seroka said the L.A. port alone is grappling with a 30% surge from last year’s record container volume.

That’s impacting companies like toy maker Exploding Kittens, says its COO Carly McGinnis.

“Our newest game, Throw Throw Avocado, has been there for about a week delayed, and it took about 50 days to get it there, so it’s already delayed. We also had a container of our most popular game, Exploding Kittens, stuck at the port of Long Beach for two weeks.”

Desperate to get their goods, the company thought about chartering a helicopter to try to pull their container out of the shipyard and renting a U-Haul to unload it themselves.

“Luckily, it was finally released a couple of days ago, but it has severely impacted our pick-ups for Walmart, Target, Amazon.”

Some of those major retailers, including Walmart, Costco and Home Depot, came up with a work-around by chartering their own smaller cargo ships – or ones that usually carry coal or grain – to ship toys and other holiday items to the U.S., as space on traditional container ships is limited.

But smaller stores have fewer options.

[MCGINNIS]: “This is certainly going to impact the mom and pop shops. They don’t have the ability to get goods in.”

Another option is to ship sooner than later – sending items in June, as some companies did, rather than the traditional holiday shipping months of August and September.

Something to keep in mind going forward.

Source: Reuters

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