‘Order your Christmas presents now,’ UPS chief says amid supply chain drag
Supply chain problems that stymied retailers and clogged U.S. ports this year are expected to continue into 2022 as the COVID-19 delta variant’s effects linger. That means shoppers face potential delays in retailers replenishing everything from video games to clothing — especially during the coming holiday season.
“I half-jokingly tell people, ‘Order your Christmas presents now, because otherwise on Christmas day, there may just be a picture of something that’s not coming until February or March,'” Scott Price, the international president for shipping giant UPS, told the AFP wire service.
Some consumers are already buying holiday gifts. More than 1 in 4 holiday shoppers plan to start by the end of this month, while more than half plan to start before Halloween, according to a new CreditCards.com survey.
Almost two-thirds of holiday shoppers plan to make those purchases online, according to the survey. That’s less than last year, but more than in pre-pandemic times, a signal of solid consumer demand, Ted Rossman, a senior industry analyst for CreditCards.com, told CBS MoneyWatch.
A semiconductor shortage riled industries from autos to consumer electronics earlier this year. Raw material shortages, like for wood, slowed the home-repair and building industries. But less-publicized industries — like clothes and toys — may not be able to get supplies on store shelves fast enough in what’s expected to be a robust and long-selling holiday season, Rossman said.
“It’s a good idea to start early,” Rossman told CBS MoneyWatch. “And if you see something you want, and you want to get it for one of your friends or family members, it’s probably good to jump on it.”
Part of the issue, UPS’s Price told AFP, is that low vaccination rates in countries that supply raw materials and components will continue to slow shipments, because higher rates of COVID-19 will lead to port closures. Once those shipments arrive at U.S. ports, they are likely to wait to be unloaded amid a labor shortage here.
Experts say retailers are preparing for the inevitable pile-ups.
“Retailers are keenly aware of the shipping bottlenecks and placed their holiday orders amid continuing healthy retail demand from consumers,” Coresight Research CEO Deborah Weinswig wrote in a blog this week. “They face the concerns of ordered items not arriving on time to make it to the shelves for the holidays, given the unanticipated recent port closures.”
A wide swath of retailers from Best Buy to Nordstrom are expecting some stress, recent earnings calls compiled by industry publication Retail Dive show. Many are arranging for more transportation, smoother logistics and earlier deliveries in preparation for the end of the year, according to the transcripts of the various calls. At Walmart and Target, open positions include more supply-chain associates.
“It may vary from company to company, industry to industry, even store to store,” Rossman said. “Sometimes — and we saw this during back-to-school shopping — there are stores that are totally picked over. And then a few miles away, they were really well stocked. So I think that’s all the more reason to start early. Give yourself some time, you know, don’t be caught by surprise by any of this.”