US retailers are struggling to meet demand as surging consumer spending combined with shortages of shipping containers, trucks and warehouse space push inventories to historic lows and spark fears over stock levels for the holiday season.
Chains from Costco to Dollar Tree have warned in recent days that port congestion is raising freight costs and lengthening the time it takes to bring goods into the US.
Stores that carried about one-and-a-half months’ worth of stock before the pandemic had their inventories to sales ratio fall to just 1.1 by March, the lowest level since at least 1992, US Census Bureau data show.
“For every 110 televisions a retailer might have in stock, they’re selling 100 of them [each month]. That leaves very little room to have a safety stock,” said Noah Hoffman, vice-president of North American surface transportation for CH Robinson.
The logistics company said many retailers had brought holiday orders forward from June to April to beat the bottlenecks. Yet consumers may still face four- to six-week waits for Christmas ecommerce deliveries, Hoffman added.
With ships from Asia waiting 12 to 15 days to unload and domestic freight carriers such as Union Pacific and FedEx accelerating peak season surcharges by months, “we don’t foresee the inventory catching up until early 2022”, Hoffman said.
Several retailers confirmed on earnings calls last week that they had accelerated orders to avoid running low on stock.
John Garratt, chief…
