Global shipping delays weigh on retailers for the holidays
WASHINGTON – There were 73 days until Christmas and time is running out for Catch Co.
The Chicago-based fishing company had found a place to sell a new product, a fishing adventure calendar dubbed “12 Days of Fishmas,” at 2,650 Walmart stores nationwide. But like so many products this holiday season, calendars were mired in a massive traffic jam in the flow of goods from Asian factories to the shelves of American stores.
As Black Friday approached, many calendars were stuck in a 40-foot steel box in the Long Beach harbor yard, blocked by other containers full of toys, furniture and car parts. Truckers had come several times to pick up the Catch Co. container, but they had been turned away. Dozens of other ships sat in the harbor, waiting their turn to dock. It was just a tiny piece in a vast labyrinth of shipping containers that thousands of American retailers were desperate to reach.
âThere are delays in every element of the supply chain,â said Tim MacGuidwin, chief operating officer for the company. âYou are really not in control. “
Catch Co. is one of many companies that find themselves at the mercy of disruptions in the global supply chain this year. Worker shortages, pandemic closures, strong consumer demand and other factors have come together to fracture the global conveyor belt that transports consumer goods from Chinese factories, through U.S. ports and along railways and highways to households and stores across the United States.
American shoppers are increasingly nervous as they realize that some toys, electronics, and bikes may not arrive in time for the holidays. Shortages of finished goods and components needed to make things like cars are fueling price hikes, disrupting work in US factories and slowing economic growth.
The disruption has also become a problem for President Biden, who has been vilified on Fox News as “the Grinch who stole Christmas.”
The White House Supply Chain Task Force has worked with private companies to try to speed up the flow of goods, even considering deploying the National Guard to help drive trucks. But the president appears to have limited power to alleviate a supply chain crisis that is both global in nature and linked to much larger economic forces beyond his control. On Sunday, Biden met with other world leaders at the Group of 20 in Rome to discuss supply chain challenges.
On October 13, the same day Catch Co. waited for its calendars to release the port, Mr Biden announced that the Port of Los Angeles and companies like FedEx and Walmart would be heading into 24-hour operations, joining the port. from Long Beach, where a terminal had started to stay open 24 hours a few weeks earlier.
âThis is an important first step in accelerating the movement of materials and goods through our supply chain,â said Mr. Biden. “But now we need the rest of the private sector chain to step up as well.”
Mr MacGuidwin praised the announcement, but said it was too late to make a big difference for Catch Co., which had struggled with supply chain issues for many months.
The company’s troubles began with pandemic-related plant closures in China and other countries, which resulted in a shortage of graphite used to make fishing rods. A global rush for shipping containers soon followed, as Americans began spending less on movies, travel, and restaurants, and more on outfitting their home offices, gyms, and game rooms with products manufactured in Asian factories.
Shipping rates have increased tenfold and large companies have turned to extreme measures to deliver their goods. Walmart, Costco, and Target have started chartering their own ships to transport product from Asia and have hired thousands of new warehouse workers and truck drivers.
Small companies like Catch Co. were struggling to keep up. As soon as Apple launched a new iPhone, for example, the available shipping containers disappeared, diverted to ship Apple products overseas.
The timing could not have been worse for Catch Co., which saw demand for its rods, lures and other products increase, with fishing becoming an ideal pastime during a pandemic. The company briefly turned to air freight products to meet demand, but at five or six times the cost of ocean freight, it reduced the company’s profits.
Supply chain issues became an even bigger issue for Catch Co.’s “12 Days of Fishmas” calendar, which featured the company’s plastic worms, silver hooks and painted decoys hiding behind cardboard windows. The schedule, which costs $ 24.98, was a “big deal” for the company, MacGuidwin said. It would represent more than 15 percent of the company’s vacation sales and introduce customers to its other products. But it had an expiration date: who would buy an Advent calendar after Christmas?
Mr MacGuidwin briefly thought about storing late arrivals for next year before realizing the calendar read “2021”.
âIt cannot be sold after Christmas,â he said. “It’s a discarded product after that.”
Like many American companies, Catch Co. had tried to prepare for global delays.
Chinese factories the company works with began manufacturing the calendar in April, even before Walmart had confirmed orders. On July 10, the calendars were shipped to Qingdao Port. But a global container shortage kept schedules idling at the Chinese port for a month, while waiting for a box to be shipped.
On September 1, nearly three weeks after crossing the Pacific Ocean, the ship anchored off the coast of Southern California, alongside 119 other vessels vying to unload. Two weeks later, the Catch Co. containers were off the ship, where they descended into the maze of boxes in Long Beach Harbor.
Inside the box
The twin ports of Long Beach and Los Angeles – which together handle 40% of shipping containers imported to the United States – struggle to keep up with the surge in imports for many months.
Together, Southern California ports handled 15.3 million 20-foot containers in the first nine months of the year, about a quarter more than last year. Dockworkers and truckers worked long hours throughout the pandemic. More than 100 trains, each at least three miles long, left the Los Angeles Basin each day.
But this fall, Southern California’s ports and warehouses were so overcrowded that many of the harbor cranes actually had Stop, without space to store containers or truckers to transport them.
On September 21, the Port of Long Beach announced that it had launched a trial to keep a terminal open 24 hours a day. A few weeks later, at the request of Mr. Biden and with the support of various unions, the port from Los Angeles and the neighboring California facility of Union Pacific joined them.
So far, few truckers have arrived during extended hours. Ports have reported bottlenecks in other parts of the supply chain, including a shortage of truckers and overcrowded warehouses that cannot get more product to their doors.
âWe are in a national crisis,â said Mario Cordero, the executive director of the Port of Long Beach. “It will be an ongoing dynamic until we have full control of the virus before us.”
In the past, Catch Co. often shipped products from West Coast ports by rail. But longer travel times on rail lines – along with high demand for containers at Chinese ports – have meant shipping companies have been reluctant to let their containers stray too far from the ocean.
Instead, the Catch Co. calendars were trucked to a warehouse outside the port owned by freight forwarder Flexport. There they were placed on another truck to be shipped to the Catch Co. distribution center in Kansas City, where workers repacked calendars for Walmart.
Mr MacGuidwin estimated that the calendars would arrive in Walmart stores by November 17, just in time for Black Friday. The complete journey of the calendar from the factory to the store shelves would take around 130 days this year, compared to the typical 60 days.
Mr MacGuidwin said he believes supply chain difficulties may ease next year as ports, railways and trucking companies gradually clear their backlogs. Asia remains the best place to manufacture many of their products, he said. But if shipping costs remain high and the disruption continues, they may consider sourcing more products from the United States and Latin America.
Catch Co. has already started designing its schedule for next year and is still in the process of deciding whether to say “2022”.
âIt’s an open question,â MacGuidwin said.