U.S. retailers are in a hurry to secure inventory during the holiday season

US retailers are having a hard time meeting demand. The surge in consumer spending, combined with a shortage of shipping containers, trucks and warehousing space, has brought inventories to historically low levels, raising concerns about holiday inventory levels.

The Costco-Dollar Tree chain has warned that port congestion has increased in recent days. Rise in fares And it takes longer to bring the goods to the United States.

Stores that had about a month and a half inventories before the pandemic had their inventory-to-sales ratio dropped to just 1.1 by March, the lowest level since at least 1992, the US Census Bureau. data Performance.

“For every 110 TVs that retailers may have in stock, we sell 100. [each month]As a result, there is little room for safety stock, “said Noah Hoffman, vice president of land transportation in North America at CH Robinson.

Logistics companies said many retailers pushed ahead with holiday orders from June to April to break bottlenecks. Hoffman said consumers still deliver Christmas e-commerce 4 He added that he might have to wait a week to six weeks.

Hoffman said that ships from Asia have been waiting 12 to 15 days to unload, and domestic freight carriers such as Union Pacific and FedEx have accelerated the peak season surcharge by several months, so “inventory is in stock.” We can’t expect to catch up until early 2022. “

Some retailers confirmed in last week’s earnings report that they had accelerated their orders to avoid running out of stock.

John Gallat, Chief Financial Officer of Dollar General, said the acquisition was “strategic.” He added that drugstore chains are happy with their inventories, but “out of stock remains higher than we would like for certain high-demand products.”

Best Buy CEO Corie Barry said that “abnormally high” consumer demand for consumer electronics retailers, coupled with supply chain disruptions, “constrains the availability of appliances, computers and television. I argued that it was producing.

Costco Chief Financial Officer Richard Galanti told analysts that Costco had placed an order for “front loading.”

“I feel this will continue for most of the year,” he said.

According to Gartner Senior Director Brian Whitlock, shipping costs are also well above normal levels, with base charges from Asia to the United States of $ 4,000 to $ 5,000 per container, $ 1,500 at the same time in 2019. It will be higher than. Some customers pay an additional $ 3,000 to guarantee capacity.

The delay caused by the stranded container ship on the Suez Canal in March exacerbated the fact that China escaped the pandemic faster than the United States and Europe left many containers in the wrong place. , Whitlock pointed out.

Roadmatch president Jason Hilsenbeck, who matches freight and trucks, said import delays were “worse than everyone remembers,” but consumer demand declined and capacity was reduced by August. Predicted that the crcr pressure would be alleviated.

Gartner’s Whitlock admitted that backlogs at West Coast ports appear to be improving, but a “container imbalance” could continue until the third quarter, when retailers typically receive holiday merchandise. Said.

In February 2022, he said, “We expect 2021 to be a challenging year until the Lunar New Year,” he said. “The current supply chain is very fragile. Events.”

U.S. retailers are in a hurry to secure inventory during the holiday season

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