Major global retailers including Costco Wholesale Corp., Walmart Inc. and Amazon.com Inc., along with their logistics partners, are likely to face continued supply chain disruptions and delivery delays caused by the coronavirus pandemic well into 2021, experts say.
The combination of stockpiling activity ahead of the holidays, a continued surge in goods ranging from electronics to appliances and a lack of air freight capacity has led to heavy congestion at U.S. ports, said Chris Rogers, supply chain analyst for Panjiva, a business line of S&P Global Market Intelligence.
Also problematic is the shortage of empty containers and other equipment needed to haul products away from port facilities, Rogers said.
"There is still a lot of product that is backed up in the system," Rogers said in an interview. "You've got this situation where I think demand for products has increased but the availability of air freight capacity has not and will not for quite a while until passenger air travel gets back to normal."
Amazon, Walmart and Costco declined to comment for this story. Ongoing volatility is likely to continue in the coming months, leading those companies and other retailers to further leverage relationships with suppliers overseas, deploy technology to help predict future demand, and boost inventory levels of sought-after items such as cleaning products and dry grocery goods, experts say. The retailers will be working to gain a competitive advantage as COVID-19 uncertainty remains high along with congestion outside large U.S. ports.
Meanwhile, consumers are likely to wait longer for deliveries and face higher costs for in-demand items as container shipping rates jump and eat into corporate profitability, Rogers said. "It's not like retailers have fat profit margins to start with, so we may see that passed through to consumers as well," Rogers said.
