Congestion at U.S. ports has not improved, and the backlog of goods has put heavy pressure on the inventory of U.S. retailers. In order to ensure the supply of goods, some small US companies have to “find another way.” According to a report by the National Broadcasting Corporation (NBC) on November 18, many small companies in the United States have recently decided to go directly to China to pick up goods in person to avoid supply delays caused by port congestion.
NBC report screenshot
The report stated that Pish Posh Baby, an online baby products store in New Jersey, only occasionally purchased products in China in the past , purchasing goods from China is only aimed at the opportunity of discounts provided by manufacturers to save money. But under the impact of the U.S. supply chain crisis, the store has changed its purchasing strategy. “Manufacturers don’t discount most of the time these days, so we go to China just to produce goods.” said store chief operating officer Charlie Birnbaum. “We’re no longer just doing it to save money, but to be able to Ensure that there are products available for sale.”
He said that he loaded the goods into the container, Provides greater control over the supply of goods. “We usually rely on American dealers to supply goods. They first pick up the goods from China and ship them to their own warehouses. Then we place an order for them to send the goods to our warehouse, and then we sell them to customers. Now we are making the next update Large orders are placed, and then the goods are shipped directly (from China) to their own warehouses.” NBC said that this approach is not an isolated case, and more and more small American companies are beginning to use similar methods to avoid the U.S. supply chain crisis. . Ryan Gunnigle, CEO of U.S. toy manufacturer Kids2, revealed to NBC that as retailers’ demand for the company’s supplies continues to increase, merchants are also hoping to purchase products directly from Kids2’s factories in China. Pickup. Gunnigl said a total of 10 large retailers have made this request to him. “Retailers are looking for big companies like us to help them solve some supply chain problems.” He said, “For example, a retailer came to us and said that he could cooperate with us and increase demand by 30%. Such conversations have already occurred. Four or five times.”
Gunniger said he had guessed the direction of events early on and that his company was lucky to have a firm foothold in China. “With local infrastructure, we can increase response time and seize more opportunities. But we also need to change our working model. We have weekly supply and demand meetings. We actually have a lot of inventory in the supply chain, and You don’t want these inventories to end up overflowing or running low.” Supply chain problems in the United States are still tight today, mainly because congestion at this key link in ports has not improved significantly. NBC said that even if companies can get goods from China and afford the shipping costs to the United States, goods will still be backlogged at U.S. ports. Cargo ships must first queue up at the port to wait for unloading, and the unloaded containers must slowly pass through the port waiting for transportation. As of the 18th, more than 80 cargo ships were still waiting in line outside the Port of Los Angeles, the largest port in the United States, with the average waiting time reaching 18.4 days. Gene Seroka, executive director of the Port of Los Angeles, estimates that the number of import containers stacked at the port’s terminals has declined, but still stands at 71,000. He said that although the situation has improved compared with October, there is still a lot of work to be done.
In October, cargo ships lined up outside the Port of Los Angeles waiting to unload cargo
Cargo The backlog is closely related to the labor shortage problem in the United States. U.S. media pointed out that trucking has always dominated the U.S. freight industry. Calculated by weight, about 72.5% of the goods in the United States are transported by trucks. But at the same time, the United States has been plagued by a shortage of truck drivers, a problem that has only worsened in recent years. According to statistics from the American Trucking Association (ATA), before the outbreak, the shortage of truck drivers in the United States increased from 48,000 in 2015 to 61,500 in 2019. Now the shortage of truck drivers in the United States has exceeded 80,000. . Such labor shortages are prevalent in many key industries. The U.S. Department of Labor reported in July that there were a record 490,000 job vacancies in the U.S. warehousing industry; as of August this year, the number of workers in the U.S. who voluntarily chose not to work had reached 4.3 million, a 20-year high. In addition, Bloomberg reported in October that the U.S. port unions have been stubbornly resisting automation for many years, which has also led to a low level of automation in U.S. ports and has hindered port cargo handling efficiency.
Containers stacked at the Port of Los Angeles
In order to ensure supply, large retailers in the United States have Use financial resources to ensure transportation.NBC mentioned that retailers such as Walmart rent private cargo ships to transport products; billionaire Ty Warner even used more extreme methods, chartering more than 150 planes in the past month or so to transport products. Its plush toy products are flown from China to the United States, and the cost of each cargo plane is approximately US$1.5 to US$2 million.
Although these methods can effectively circumvent congestion at California ports, they are too expensive and are impossible for small businesses to follow. In order to ensure sufficient supply of goods, small businesses in the United States can only “get creative” on their own. According to reports, one solution is to go to China to pick up the goods directly. Some companies have begun to build their own warehouses to avoid the crisis at the port.
Levi Conlow, CEO of the American electric bicycle company Lectric eBikes, said that currently at U.S. ports, the entire logistics process may take several days. weeks of time. “The third-party logistics and distribution centers in Los Angeles can no longer help. They don’t have enough spare capacity to take the goods out.”
Conlow said that long before the port congestion worsened, , his electric bicycle products have been difficult to keep in stock, and now he plans to simply abandon the logistics system of the Port of Los Angeles and start building his own warehouse.
NBC pointed out that a series of “dramatic measures” taken by small U.S. businesses to maintain inventory and meet customer demand showed that the U.S. supply chain crisis still puts great pressure on retailers. As Birnbaum points out: “There are problems all the way from sourcing raw materials to getting the goods to U.S. customers.”</p
