Supply chain issues won't ruin the holidays because America's retailers refuse to let it happen
Inventories for the holidays for many large retailers are already on U.S. soil
By now everyone has seen the images of container ships stacked high with merchandise destined for store shelves idled in droves outside U.S. ports waiting to dock and unload. Supply chain woes are grabbing headlines and leaving many Americans justifiably concerned that this year’s holiday Grinch will materialize in empty store shelves, leaving customers frustrated and unable to secure the products they want to celebrate the season.
But Santa has never been known to let a challenge big or small get in the way of delivering the magic of the holidays to families. This year, I’d still bet on Santa to deliver.
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It is true that the pandemic has thrown sophisticated supply chains for a loop. An extraordinary confluence of circumstances—enormous demand, challenging labor shortages, soaring costs to ship freight, constrained capacity and equipment shortages, challenges of existing transportation networks and backlogs at our ports—are all straining retail supply chains.
But what consumers need to know is that many of these factors have been in play for months, if not years. This isn’t an overnight problem, which means sophisticated retailers have been able to make significant investments and adjustments to mitigate delays and congestion.
Knowing the 2021 holiday season would feature bottlenecks, setbacks, and constrained capacity, retailers have worked to pull forward production and shipping wherever possible. In many cases, inventories for the holidays for many large retailers are already on U.S. land.
Anticipating delays, large retailers are using all available modes to re-route shipments as needed. Savvy retailers are collaborating with suppliers and service providers to plan the most efficient sourcing and transportation strategies to keep products moving. And retailers are intently focused on recruiting, hiring, and training distribution center and fulfillment talent to ensure products make their way to store shelves and customers’ doorsteps.
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The supply chain problems in this country and around the world are complex, but that doesn’t mean they are impenetrable. The pandemic has shined a light on the vulnerable underbelly of systemic challenges facing global supply chains, and this notoriety may create the momentum needed for change.
To solve current problems and ensure that future disruptions are minimized, we must take a comprehensive look at the operational impediments at play.
Retailers appreciate the Biden-Harris administration’s commitment to unlocking the potential of the U.S. and global economies through our supply chains. While there is no single policy that can remedy the current situation, there are important incremental steps across the supply chain that could begin restoring a semblance of fluidity to the transportation networks.
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President Biden’s encouragement to begin 24/7 operations at our nation’s busiest ports is a welcomed step towards needed efficiencies, and a trend the broader supply chain ecosystem must continue to move toward. Additionally, modernization and better data sharing are key elements to address the current disruption in ports.
Other measures that warrant immediate consideration include removal of duties on new chassis, addressing the dislocation of chassis and containers for return, and committing to interoperable data infrastructure standards that can enable the visibility and plannability necessary for today’s light-speed supply chains.
The administration should also continue to bolster the Federal Maritime Commission’s work providing oversight of foreign-owned ocean carriers, alliances, and terminal operators, sending the message that fair and open supply chains are essential to the American economy.
Long-term investments will be needed to fix today’s supply chain disruptions so that these problems get solved and not repeated. And shoppers should take comfort in knowing that the private sector and government are working together on these immediate and pressing problems.
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Congress passed the administration’s Infrastructure Investment and Jobs Act which represents a historic and needed investment in all facets of our transportation networks—ports, rail, bridges, and roads. This historic legislation will help keep U.S. businesses globally competitive, and domestic-based retailers are eager to see it implemented. Now that it has been signed into law, large shippers and users of infrastructure should have a voice in helping determine where funds can best be applied to maximize impact.
The pandemic has created countless disruptions for all Americans, but doom and gloom aren’t inevitable this holiday season. We’ve all learned how to pivot when necessary, and leading retailers are logistical ninjas. Think of them as Santa’s elves this year.
If any muscle has been flexed over the past two years, it’s that of resiliency. Retailers are working around the clock to ensure they meet customer demands this holiday season. Consumers can take advantage of buying online and picking up at stores to avoid delays by parcel carriers. And shop at trusted retail sites to avoid buying fake or stolen products from unscrupulous sellers online. Get vaccinated if you haven’t already, be kind when you shop, and this holiday season let’s celebrate the remarkable circumstances we’ve navigated—and look forward to a brighter 2022.
Brian Dodge is the president of the Retail Industry Leaders Association.