Supply-Chain Delays Hit Retailer Restocking Efforts

Supply-chain bottlenecks caused by a crush of imports heading into U.S. seaports are pinching retailers’…

Supply-chain bottlenecks caused by a crush of imports heading into U.S. seaports are pinching retailers’ efforts to stock up as consumers pick up their spending.

Executives at

Steve Madden Ltd.

and

Crocs Inc.,

merchants known for their footwear, both said in their third-quarter reports this week that they were hit by logistics delays in getting goods to distribution centers and stores heading into a critical selling season.

“There was sort of a limited supply or a challenge getting containers and vessels, which slowed things down overseas,” Steve Madden Chief Executive and Chairman Ed Rosenfeld said on the company’s earnings call on Tuesday. He said operations at the company’s warehouses and those of its wholesale customers also “have been slower just due to some labor shortages and other disruption due to Covid.”

Mr. Rosenfeld said the delays have stretched out the process of getting goods from factories to stores by about two weeks.

Container shipping lines canceled hundreds of sailings this spring and summer as coronavirus-driven lockdowns sent national economies reeling and global trade withered. But demand snapped back strongly over the summer after businesses reopened and retailers rushed to restock inventories to get goods in place for a hoped-for rebound in the fall.

“What you saw earlier on I think has very much smoothed out as we’ve…gotten further into this,” said Jess Dankert, vice president of supply chain at the Retail Industry Leaders Association, a U.S. trade group.

“The story of supply chain is, something happens and you need to adapt.” she said.

Trade has rebounded at a rapid pace since a swath of businesses around the world retrenched in the early weeks of the pandemic.

Global container shipping volumes were up 34.2% in August from February, when many of China’s factories were shuttered, according to London-based Container Trade Statistics. That has sent a wave of containers into U.S. ports, with the Global Port Tracker report by the National Retail Federation and Hackett Associates reporting the highest volume in August in records dating to 2002.

Although container lines have recently restored some of their idled capacity, the surge in demand has left companies exporting from Asia waiting to find scarce space on ships and led to growing delays in moving goods through the ports of Los Angeles and Long Beach, which together are the main American gateway for Asia imports.

The Pacific Merchant Shipping Association, a trade group representing marine terminal and vessel operators, said it took an average of 4.3 days to handle containers arriving at the Southern California ports in September, more than double the time it took in March. More than 21% of inbound containers sat at docks for more than five days in September, the PMSA said, more than double the rate a month earlier.

Most of Steve Madden’s products for the fall are coming from China, but the company will “diversify out of China again” for the spring, Steve Madden’s Mr. Rosenfeld said.

Crocs Chief Financial Officer Anne Mehlman said the company, known for its rubber slip-on sandals, said the company was spending more and waiting longer to get shipments delivered.

“We are certainly seeing elevated logistics costs as well as just kind of logistic delays around the world…and we do expect those logistic costs to continue through next year,” Ms. Mehlman said.

Write to Allison Prang at [email protected]

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