Congestion is continuing to mount at the shipping ports in Guangdong Province in southern China due to a new COVID-19 outbreak that could take months to reverse. Though it’s not yet summer, the ongoing delays could affect inventory levels in the United States during the ever-important holiday shopping period.
Rising coronavirus cases in southern China follow a wave in late May. Government restrictions affecting port workers are causing several terminals to operate below capacity. Not only are shoes backed up getting from factories to ports, some ships aren’t stopping at certain ports or are delayed, said Andy Polk, SVP at Footwear Distributors and Retailers of America.
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Polk said retailers and brands are now constantly rejiggering approaches to navigating the port delays.
“If you adjust one thing to fix one logistical challenge, it means you likely have to adjust and update every other point down the supply chain to ensure the fix doesn’t cause you issues elsewhere. It is a lot of adjusting, pivoting and praying,” Polk said.
The global supply chain has already been greatly affected by the pandemic, creating shortages and increases in shipping costs, an expectation that will continue into 2022. Consumers may have to wait longer than expected for goods, just as demand this summer is expected to bounce back, spurred in part by pent-up back-to-school-related spending.
Retailers, meanwhile, are feeling an impact on their bottom lines as it costs more now to ship goods to the U.S. — and they continue to endure longer wait times for merchandise.
“The rise in COVID in the Guangdong province is enlarging the logistics challenges companies were already facing. It’s like high-speed calculus, but once you figure out the formula and get an answer, the variables already changed and you have to do the math again,” concluded Polk.