ATLANTA (CNN) – Do not be surprised if you can not find your favorite cheese on your next trip to Costco.
Costco is struggling to stop imported cheeses due to a shortage of shipping containers around the world and bottlenecks in major West Coast ports, such as Los Angeles, Long Beach, Oakland and Seattle. The combination has led to delays for suppliers shipping their goods, retailers such as Costco receiving products, and higher costs in the supply chain.
“Overseas cargo is still a problem due to the shortage of containers and delays in the port. It has caused delays in certain categories,” Costco chief financial officer Richard Galanti said in a call to analysts last week.
The problem is not only limited to cheese, but also seafood, olive oils, furniture, sports goods and grass and garden equipment, Galanti said.
He expects the “pressure to ease in the coming months, but it affects everyone.”
Supply Chain Pressure
The supply chain pressure was constant for retailers throughout the pandemic. But a chorus of chains, including Crocs, Urban Outfitters, Foot Locker and Dollar Tree, have in recent weeks described the shortage of containers and backlogs in West Coast ports as the latest challenges in securing consumer merchandise.
“Importing products from Asia, getting them through Long Beach and other ports and sending them to customers is currently very challenging,” Crocs CEO Andrew Rees told analysts on February 23. “I think it will get smoother over time, but it’s going to take a while.”
“We are experiencing delays in receiving import goods due to global equipment shortages and port congestion issues,” Dollar Tree chief financial officer Kevin Wampler said last week.
And home goods at Anthropology have also been delayed in coming to the United States due to the shortage of cargo containers in Asia, said Francis Conforti, CEO of Urban Outfitters, in a call with analysts.
“We are starting to see very, very slight improvement, and we are hopeful that the improvement will continue at a moderate pace.”
Pandemic question
Demand for food, furniture, appliances and household goods has increased in the pandemic as consumers spend more time at home. It does not leave.
U.S. imports into the sea climbed 20% in January compared to last year, according to the latest data available from Panjiva, a global trade data research firm. According to Panjiva, the importation of discretionary goods such as household appliances was the biggest driver.
Increased demand and supply chain disruption also increase costs: Total shipping costs by sea to the United States reached $ 6.36 billion in January, compared to $ 2.46 billion a year earlier.
“The supply chain is maximizing,” said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, a retail trade group. Gold said U.S. ports “could not handle the volume” due to an increase in demand, as well as hundreds of workers who became ill through Covid-19.
“There have been longer containers sitting at the port than they usually do” and “the availability of empty containers has been a challenge, both here and abroad,” he said.
The pressure led to more companies switching 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 sea freight,” he said.
Gold said businesses are trying to prevent the higher costs they face from being passed on to consumers, but some retailers may be forced to offset the rise by raising prices on the shelves.
The-CNN-Wire ™ & © 2021 Cable News Network, Inc., a Time Warner company. All rights reserved.