The container shipping industry remains in the doldrums thanks to the COVID-19 pandemic. It hammered shipments earlier, as we noted in these pages: and its ongoing effects are creating long-term problems for shippers and their customers. GCaptain reports:
From sportswear maker Puma to mall stalwart Gap , many retailers have been forced to reduce or slow down shipments of new merchandise. Civil unrest in the United States has compounded their problems by further clouding the prospect for a recovery in the world’s biggest retail sales market.
Puma’s Chief Executive Bjorn Gulden, for example, said it was managing some of its excess inventory by stowing it on slow-going ships as stores in the United States and Europe tentatively reopen.
However, at the same time, the shipping slowdown has created headaches for those retailers, from Walmart and Amazon to shoe seller Rothy’s, who have never stopped selling products to homebound consumers, ranging from books and shoes to exercise equipment, much of it sold online.
Now those retailers are fighting for space on the fewer, faster-moving ships on the high seas.
. . .
Slower shipping times also means importers can delay payments made on delivery . . . Shereen Zarkani, Maersk’s global head of sales, told Reuters: “One customer told us: If you make my container go around the world a couple of times that would be good.”
. . .
There does not appear to be any let-up in sight for container shipping companies as their retail clients could still be feeling acute financial pain in July, when they begin placing orders for holiday and winter merchandise.
There’s more at the link.
I’ve noticed the effects of shipping disruptions in a number of areas. For example, there was a particular part I needed in my ongoing efforts to rebuild some older rifles for friends. I ordered it in mid-April, but found it was out of stock at the time. The manufacturer was waiting on a couple of injection-molded plastic components from an overseas supplier, which they would then build into the finished product. Their supplier had the parts, but couldn’t find shipping space to send them. I was notified just this morning that the part I needed is finally in stock, and my order is in the process of being fulfilled. That’s a seven-week wait, for a part that’s normally available 24/7/365! I know I wasn’t their only frustrated customer. It’s yet another example of how “just-in-time” manufacturing can grind to a halt if supplies of parts and components don’t reach the factory on a regular basis.
The after-effects of the coronavirus pandemic are going to be with us for at least the rest of this year, and probably well into 2022. Be prepared for that.
JIT warehousing is also taking a big hit. If you can't get 'stuff' to your warehouse, you can't service your storefronts. But things ARE coming back. HSVs are hauling empty CONEXs back to the far east by the thousands. I'm also seeing more east coast CONEXs moving through here, which tells me that restocking is taking place, albeit slowly.
As I said, every single time, at workplaces switching to JIT systems: "Murphy's out there, he's an SOB, and he's just waiting to get you".
And even before this, I was proven right.
Another reason to look for a small CNC mill and a 3d printer when I have a place to put them. Thanks, Peter!
I work for a Home Depot.
We just ran out of pressure treated lumber. The delivery truck is over 2 weeks late.
Its not just us either, the local Lowes is just as short, and I when I checked in with a local hardware/lumber store he said he expects to be out before the end of the week.
I work for one of those. Appliances are about to be in short supply (very limited now, just whatever's left in stock) until mid-August. And that's just the eta.
You can thank Bill Clinto for the phrase "just in time logistics". He is the one that decided to tax the inventories of companies as income which caused them to empty their stocks.
Some companies store inventory on semi trailers or even on ships and barges because it is 'in transit' and not 'in inventory' so they don't get taxed on it.
Right now, we've idled about 40% of the ship bunkering capacity set up to service port of NY/NJ. For the port, it's about 120 bunker loads off average. Cruise ships and laid up container ships are missing, mostly, but many container lines are cooperating in joint carriage ventures to save on fuel by cutting the number of ocean crossings.
I wouldn’t be surprised if manufacturers are letting the goods sit idle until the unrest dies down.
Why would you want to continue to ship product for looters and thieves?