- The days of ever-worsening shipping delays appear to be over, but new challenges have appeared.
- For furniture retailers, predictably bad schedules have been replaced by unpredictable ones.
- “A 20-day transit would be somewhere around 65 days, then it’s 35. And then it’s back to 80,” an expert told Retail Dive.
Before the pandemic threw global supply chains into disarray, furniture retailers could count on a smooth journey for products from the moment they were loaded onto a container ship.
“A lot of companies historically have been able to say, ‘Well, once it’s on the water, we know it’s six weeks to your house,” Overstock.com CEO Jonathan Johnson told Retail Dive. “When the Port of Long Beach in Los Angeles looks like the 405 freeway, backed up out into the ocean, that ‘six weeks to home’ doesn’t happen.”
Similarly, during the worst of the pandemic’s delays, shipping lead times continued to worsen — but at least they were somewhat consistent, industry experts say. Now that consistency — bad as it was — has been replaced by something arguably more difficult to manage: unpredictable schedules.
“That’s been the biggest pain point for a while,” Rick Jordon, senior managing director with FTI Consulting, told Retail Dive. “A 20-day transit would be somewhere around 65 days, then it’s 35. And then it’s back to 80.”
That situation has led Overstock.com to implement a policy of not selling anything that is “on the water,” and only offering products that the company knows are in its domestic warehouses.
Backlogs at West Coast ports like Los Angeles and Long Beach last year led to a major reshuffling for importers, pushing more containers eastward to ports like Norfolk, Virginia, and Charleston, South Carolina. But earlier this month, vessel tracking website Marine Traffic said waiting container volumes on the East Coast had overtaken those on the West Coast.
For some companies, the answer has been to bulk up inventories in an attempt to get ahead of consumer demand, Andrew Csicsila, a managing director in AlixPartners’ consumer products practice, told Retail Dive.
But that is a risky strategy with inflation at a 41-year high, which could lead shoppers to rethink some purchases and leave companies holding a bunch of unsold goods. For now, however, retailers don’t really have an alternative.
“The last thing you want to do is say something is out of stock,” Csicsila said.