The ongoing disruption to the global supply chain caused by a lack of containership capacity and port congestion continues to be a major point of concern for the retailing industry and is now increasingly drawing the attention of regulators and government officials. The National Retail Federation sent an open letter to President Joe Biden asking for a meeting to discuss the problems and their impact on the U.S. economic recovery, while two U.S. House of Representatives committees launched hearings into the issue.
“The supply chain disruption issues, especially the congestion affecting our key maritime ports, are causing significant challenges for America’s retailers,” wrote NRF President and CEO Matthew Shay in his letter addressed to President Biden. “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 retailers’ trade association documented the depth of the problems in the shipping industry are causing for the retailing industry by citing the results of a recent survey of its members. They reported that 97 percent of retailers said they have been impacted by port and shipping delays, citing the lack of carrier capacity and containers overseas as the largest problems beyond the congestion in the ports.
While they have added two to three weeks to their supply chains, nearly all (85 percent) of retailers still reported that they are experiencing inventory shortages because of the disruptions. Further, three-quarters reported that they are being forced to pass along cost increases to consumers.
“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,” the NRF writes. “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.”
The NRF is requesting a meeting with the President and his administration along with several retail leaders to talk about the current supply chain challenges as well as potential solutions to address current and future disruptions.
The release of the NRF’s letter came as the House Committee on Transportation and Infrastructure and the Subcommittee on Coast Guard and Maritime Transportation commenced a joint hearing titled “Impacts of Shipping Container Shortages, Delays, and Increased Demand on the North American Supply Chain.” The hearing on June 15 was set to examine the shipping container shortages caused by heightened demand for consumer products arriving from Asia, as well as how overstretched supply chains have affected the nation’s ports.
Testimony at today’s committee hearing included Federal Maritime Commission Chairman Daniel Maffei as well as Commissioner Rebecca Dye. Other speakers addressing the committee included the World Shipping Council, the International Longshore & Warehouse Union, and representing American ports, Gene Seroka, Executive Director of the Port of Los Angeles.
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