Photo: FREDERIC J. BROWN / AFP / Getty Images
We are at the beginning of October, the beginning of the last quarter of the year where consumption levels tend to reach higher levels due to the arrival of the year-end and Christmas shopping.
But the chain of Supply of some retailers is still on hold due to coronavirus and labor shortages .
At the beginning of the year, the bottlenecks that stopped the global supply chain were expected to 2020 would have been fixed for the most part. In reality, they have only gotten worse and worse leaving the Christmas season at risk.
In Europe, retailers such as the clothing chain H&M cannot meet the demand due to delays in deliveries .
In the United States, Nike cut its sales forecasts after Covid- 19 caused the closure of factories in Vietnam, which ended months of production. And the shares of Bed Bath & Beyond slumped amid shipping issues, and their CEO, Mark Tritton, He warned that the outages will drag on well into next year.
Coronavirus outbreaks still have paralyzed port terminals so there are not enough cargo containers which has caused prices to multiply by 10 with respect to a year ago.
In addition to labor shortage It has brought trucking to a standstill and sent US jobs to an all-time high.
The latest survey of purchasing managers from the Institute of Supply Management (ISM) showed that Average delivery time for production materials in September increased to 92 days , the highest level observed in data dating back to 1987.
Lead times for supplies used in maintenance, repairs and operations equaled a previous record of 45 days. However, for factory purchasing managers looking to upgrade or replace equipment, the average delivery time increased by 8 days to 154 days, the longest since 1989 .
Christmas is in danger
This is expected to be a disappointing holiday season as analysts have raised concerns about the possibility that margins will be affected.
The S&P Retail Select Industry Index, which includes 108 US companies, including Amazon, Macy’s and Best Buy, has risen near a 40% this year and has nearly doubled since the start of 2020 .
The jubilation collides with what happens behind the scenes, as retailers have resorted to buying items manufactured a couple of years ago to ensure of at least some inventory.
The supply chain is worsening in the country’s ports, especially in Los Angeles, where there are problems getting the merchandise off the ships load , which in some cases, have taken more than six weeks to be downloaded according to a Bloomberg report.
Related: California records record of rows of cargo ships in their ports waiting to enter merchandise
It is not only the fault of the coronavirus
The arrival of the coronavirus pandemic brought down the global economy when factories stopped their production.
However, the supply chain has been disrupted by events such as the blockade of the Suez Canal as well as the hand shortage of work and increased transportation costs.
Analysts expect large retailers to dramatically increase their logistics spending and even resort to using more expensive air freight or leasing entire vessels to maintain their sales targets leaving smaller competitors who may not be able to receive their products adrift.
Some companies have made the decision to move their production to points closer to the United States such as Mexico or Brazil, reducing the risk in the Asian markets like Vietnam.
Manufacturing goods closer to the US has led some companies to expect delivery times to be up to twice as fast than competitors.
There are still three months until the end of the year but the greatest risk is that Americans spend less than expected due to insufficient stocks.
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