ATLANTA (CNN) – On your next trip to Costco, don’t be surprised if you can’t find your favorite cheese.
Costco has problems stocking imported cheeses due to a shortage of shipping containers around the world and bottlenecks at major West Coast ports such as Los Angeles, Long Beach, Oakland, and Seattle. The combination has resulted in delays for suppliers shipping their goods, retailers such as Costco receiving products, and increased costs in the supply chain.
“Overseas freight remains a problem with container shortages and port delays. This has caused timing delays for certain categories,” said Richard Galanti, Costco’s chief financial officer, during a phone call with analysts last week.
The problem is not just limited to cheese, but seafood, olive oil, furniture, sporting goods, and lawn and garden tools, Galanti said.
He expects that “the pressure will ease in the coming months, but it is bothering everyone”.
Supply chain pressure
Supply chain pressures have been constant for retailers throughout the pandemic. But a chorus of chains, including Crocs, Urban Outfitters, Foot Locker and Dollar Tree, in recent weeks have described container shortages and port backlogs on the West Coast as the latest challenges in securing merchandise for consumers.
“Importing products from Asia, getting it through Long Beach and other ports and getting it shipped to customers is a real challenge right now,” Andrew Rees, Crocs CEO, said in a Feb. 23 interview with analysts. “I think that will diminish over time, but it will take a while.”
“We are experiencing some delay in receiving imported goods due to global equipment shortages and port congestion issues,” said Kevin Wampler, Dollar Tree CFO, last week.
And household items at Anthropologie have also been delayed in arriving in the United States due to container shortages in Asia, Francis Conforti, COO of Urban Outfitters, said during a phone call with analysts.
“We are starting to see a very, very small improvement, and we hope that the improvement will continue at a moderate pace.”
Pandemic question
Demand for food, furniture, appliances and household items has increased during the pandemic as consumers spend more time at home. It has not stopped.
According to the latest available data from Panjiva, a research firm for global trade data, US imports by sea were up 20% in January from last year. According to Panjiva, imports of consumer goods such as household appliances were the main driver of growth.
Higher demand and supply chain disruption are also driving higher costs: the total cost of shipping to the United States by sea was $ 6.36 billion in January, compared to $ 2.46 billion a year earlier.
“The supply chain has been maximized,” said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, a retail trade group. Gold said US ports “cannot handle the volume coming in” due to a surge in demand, as well as hundreds of workers who have been affected by Covid-19.
“Containers are in port longer than usual” and “the availability of empty containers has been a challenge both here and abroad,” he said.
The pressure has led more companies to turn to air freight to ship goods. Until now, air freight was “always a last resort because it was eight to ten times more expensive than ocean freight,” he said.
Gold said that while companies are trying to avoid passing on to consumers the higher costs they face, some retailers can offset the increase by raising prices on the shelves.
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