It is almost spring, yet many retailers are still waiting for deliveries of shorts, sandals and other warm weather gear, a sign that the supply-chain problems of the past two years haven’t abated. It is estimated that retailers will see average delays of one to two months on shipments this spring.
Retail chains, including Lululemon Athletica, Kohl’s, and Abercrombie & Fitch, said that supply-chain delays hurt holiday sales. Those problems are continuing well into the new year.
Macy’s said the chain is facing shortages of women’s shoes, handbags and toys. “There’s still a fair amount of supply-chain disruption when you think about between 60 and 70 vessels still anchored off Long Beach in L.A. trying to get in,” says the Foot Locker CEO.
Exacerbating the crunch is strong consumer spending that is pitting surging demand against limited supplies, writes The Wall Street Journal (March 10, 2022). After two years of Covid-19-related restrictions, retailers are betting that consumers are eager to update their wardrobes as they head back to the office, travel and attend more social engagements.
While large chains such as Walmart and Home Depot worked to sidestep some of the delays by chartering their own ships, the problem now is less about transporting goods across the ocean and more about a shortage of truckers in the U.S. Many chains are placing orders with overseas factories earlier, and paying hefty sums to fly the goods to the U.S. But that isn’t necessarily solving the problem, and it ties up capital in inventory.
As of last month, Untuckit was waiting for 177,000 items that should have arrived at the end of December, equating to about $15 million in lost revenue. For the spring, Untuckit bumped up orders by two months and is flying in goods for as much as $10 a shirt.
This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.