Port Congestion Causes Delays, Increased Costs for Retailers

Los Angeles’s biggest port is more jam packed than its pre-pandemic nightclubs on a Saturday night. Increased demand is bottlenecking ports, gumming up supply chains, and delaying product deliveries for retailers.

Anchored down: The port gridlock has created logistical hurdles for several retail segments.

• Peloton lost 12 days in expected supply time as a ship idled outside the Port of Los Angeles from late December to early January.
• Steve Madden slashed its Q1 sales expectation by $30 million due to supply chain problems.
• Crocs CEO Andrew Rees told analysts during a recent earnings call that getting merchandise through trans-Pacific ports is “really challenging right now.”

Taking flight: Some retailers, like Anova Culinary, are looking to the skies to bypass the logjam. While air cargo is typically more expensive, rates have tapered off since the early days of the pandemic.

Looking ahead…Experts told the NYT shoppers will likely spend their newly issued stimulus checks on clothing and appliances, which could further clog ports. But as reopenings continue, and consumers spend more on experiences and less on products, the delays could subside.