With supply chain pressures and costs increasing by the day, The National Retail Federation is asking President Joe Biden to step in and help fix port congestion at a critical time.
“The supply chain disruption issues, especially the congestion affecting our key maritime ports, are causing significant challenges for America’s retailers,” NRF President and CEO Matthew Shay wrote in a letter to the White House today. “The congestion issues have not only added days and weeks to our supply chains but have led to inventory shortages impacting our ability to serve our customers. In addition, these delays have added significant transportation and warehousing costs for retailers.”
The NRF told Biden in the letter, which asked for a meeting to address the situation, that as the nation’s largest private-sector employer, retailers rely on U.S. ports and other infrastructure to deliver billions of dollars’ worth of goods and products to consumers every day.
“We continue to work with key executives at the ports and with our transportation providers. We need strong leadership from the administration to galvanize attention to the current situation as well as work to resolve long-standing issues that limit safe and efficient port operations,” Shay wrote. “As the administration undergoes supply chain reviews for critical sectors, including transportation, addressing the current state of our nation’s ports and freight movement needs to be a critical component of the strategy. As trade continues to grow, we need to make sure we have truly 21st century ports and freight movement. This certainly is central to the administration’s Build Back Better approach.”
The urgent plea comes after NRF bumped up its annual retail forecast, projecting last week that sales would grow between 10.5% and 13.5% this year, to more than $4.44 trillion.
But as the economic recovery accelerates amid pent-up consumer demand, more than 97% of retailers surveyed by the NRF say they have been impacted by port and shipping delays.
“In many instances retailers will absorb these costs and not pass them along to consumers. However, many smaller retailers may have no choice but to pass along these costs, especially as they face other challenges with reopening their businesses,” Shay said in the letter, noting that domestic suppliers and transportation providers are also being impacted.
As the situation worsens stateside, new obstacles in China are also fueling anxiety across the footwear industry.
Congestion is continuing to mount at the shipping ports in Guangdong Province in southern China due to a new COVID-19 outbreak that could take months to reverse. Though it’s not yet summer, the ongoing delays could affect inventory levels in the United States during the ever-important holiday shopping period.
Rising coronavirus cases in southern China follow a wave in late May. Government restrictions affecting port workers are causing several terminals to operate below capacity. Not only are shoes backed up getting from factories to ports, some ships aren’t stopping at certain ports or are delayed, said Andy Polk, SVP at Footwear Distributors and Retailers of America.