Yosef Benari. October 26, 2021
Think about something that now costs far more than it did a year ago and, at the same time, it gives you far less value for your money than it used to. In the current era of inflation, it isn’t hard to find something to fit that description. But of all the goods and services in the entire world, ocean container shipping is probably on the top of this list. While rates faced a meteoric rise, delivery reliability has cratered amid unprecedented port congestion. Right now, ocean cargo shippers are having to pay a lot more than they ever have before for the worst service they’ve ever experienced. In today’s inflation era, when higher prices account for lower service quality, the relentless rise in ocean shipping rates is making everything more expensive.
Recently, consultancy firm Drewry updated its forecast and now it predicts that global container rates will spike by 126% this year compared to 2020, including both spot and contract rates across all trade lanes. On the other hand, global carrier schedule reliability dropped to 33.6% in August, an all-time low. In August 2019, reliability used to be more than double that, according to Sea-Intelligence data. The firm calculated that the global delays for late vessels were 7.57 days, nearly double the number of days late in August 2019.
In a recent report, the supply chain visibility platform Project44 highlighted that pricing and quality are extremely disconnected at this point. By compiling data collected from several consultancy firms, the platform found that between August 2020 and August 2021, the monthly average of days delayed on voyages from Yantian, China, to Los Angeles skyrocketed 425%, from 2.46 days to 12.93, meaning that supply chain disruptions between China and the U.S. West Coast shot up by 425% in a 12-month period, and over that same period, the average short-term rates escalated by 102%.
That’s a phenomenon described by Neil Irwin in a recent article for The New York Times as “shadow inflation” — when you pay more for a product or service that’s not as good as it used to be, but since the price of everything is up, you don’t actually notice how much more you’re paying for that. Several retailers and manufacturers are already anticipating more shipping chaos ahead of the holiday season, and they have been panic buying to ensure inventory before consumers start to do the same and leave shelves bare in the busiest shopping season of the year.
Industry insiders recently told CNBC that U.S. retailers have been overordering or placing orders too early due to the widespread panic surrounding the massive supply chain crisis, but that’s only making things much worse, and pushing shipping prices to new highs. Retailers’ panic buying frenzy is resulting in a bigger crunch on capacity, and creating what a “bullwhip effect”. As a consequence, this effect could result in distorted demand forecasts and a backlog of unfulfilled orders.
About a week ago, RBC Wealth Management also sounded the alarm on the same issue. “Because the problems are well known, orders for raw materials, component parts, and finished goods are now being placed earlier than normal, which is lengthening the queue, creating a vicious cycle,” the firm said in the note.
All of this means that in the coming months, consumers will be facing extensive shortages at the stores, while millions of products pile up on cargo ships stuck outside our key ports. Consumer prices are also expected to surge due to high demand and low supply. For that reason, last week, shipping and transport firms urged California officials to declare a state of emergency to help ease congested ports in the area. On Monday, the ports of Los Angeles and Long Beach hit a fresh record of 100 cargo ships stranded off the coast waiting to dock and unload, according to data from the Marine Exchange.
Before the onset of the health crisis, the highest record in both ports had been 17 cargo ships waiting to anchor. As retailers and manufacturers desperately try to find available vessel space, spot prices might send overall shipping costs up to the tune of hundreds of thousands of dollars. For over a year, the global shipping industry has been operating at full capacity and supply chain lines have been stretched to the max. Without any support to address worker shortages, bottlenecks, and delays, problems have only been aggravated and these issues are about to reach a critical mass. Even though U.S. consumers continue to order more goods, there’s simply no flexibility in the system to accommodate that demand, and now Americans are about to witness a supply chain collapse like no other while hyperinflation plagues our country.
34 thoughts on “Panic Buying Sweeps Across US Retail Stores As Fear Of Shortages Continues To Rise”
cialis us – tadalafil 40mg sale cialis ca
plaquenil 200mg cheap – buy plaquenil 400mg without prescription cost plaquenil 200mg
stromectol ebay – stromectol nz ivermectin 2mg
cephalexin 125mg generic – purchase cleocin pill erythromycin 500mg without prescription
fildena pills – buy disulfiram pill order antabuse pills
rhinocort allergy nasal spray – purchase seroquel pill buy cefuroxime 250mg pill
brand careprost – buy desyrel 100mg online desyrel for sale
us pharmacy viagra – cheap ranitidine 300mg brand ranitidine
cialis 5mg oral – stromectol virus ivermectin 12 mg without a doctor prescription
genuine cialis – ivermectin 6 mg for humans best ed pills at gnc
vegas casino online – buy prednisone 10mg prednisone 20mg usa
order prednisone 40mg sale – prednisone price order accutane 40mg
brand amoxil 1000mg – generic amoxil order sildenafil generic
cost of cialis – cialis 20mg usa order cialis online cheap
ivermectin lotion 0.5 – buy ivermectin 6 mg online azithromycin 250mg us
zithromax 250mg cheap – buy furosemide 100mg without prescription medrol 16 mg otc
buy baricitinib 4mg pills – baricitinib generic dapoxetine 60mg sale
glucophage usa – cheap metformin order generic atorvastatin 40mg
amlodipine over the counter – buy norvasc 10mg buy prilosec sale
order metoprolol 50mg sale – tadalafil tablet cialis 40mg pill
purchase cialis for sale – viagra pills 25mg order viagra 100mg online
ivermectin pills canada – ivermectin 6mg for sale where to buy ivermectin for humans
clomiphene 50mg tablet – albuterol 2mg oral cetirizine ca
desloratadine 5mg sale – triamcinolone 10mg generic aristocort 4mg tablet
order misoprostol 200mcg without prescription – buy synthroid online cheap cost synthroid 75mcg
sildenafil 25mg price – sildenafil 200mg order gabapentin 600mg online cheap
cialis tadalafil 5mg – cenforce 50mg over the counter order cenforce 50mg without prescription
diltiazem online – buy diltiazem pill buy generic zovirax 400mg
hydroxyzine 10mg for sale – order atarax generic rosuvastatin 10mg drug
buy ezetimibe 10mg pill – purchase celexa sale celexa drug
viagra uk – lisinopril 2.5mg cost order flexeril for sale
viagra pills 150mg – order tadalafil tadalafil 10mg canada
buy toradol 10mg sale – zanaflex pill buy ozobax generic
colchicine cheap – order inderal 10mg sale buy strattera 10mg sale
Comments are closed.