Over-ordering is causing even more problems with supply chain
By Matt Collins Article may include affiliate links
Supply chain experts are warning retailers against “panic” based over ordering amid concerns over supply chains because it could end up putting even more burden on the system.
With media reports warning that holiday gift items might not be available on store shelves, some consumers are busy stocking up with what they can find now.
Retailers, meanwhile, also appeared spooked by the issue and have been trying to get ahead by ordering early and ordering more in the hopes they can meet customer demand.
The problem is that that’s causing even more containers to get loaded onto ships that ultimately end up stuck off the U.S. coast waiting to go through customs, get unloaded and have the containers sent off via train or truck to their next destination.
On the other hand, retailers are afraid they won’t have enough items in stock, leading to customer disappointment and lost revenue.
It’s easy to get caught up, both as a consumer or retailer, with the urge to “stock up” on as many items as you can when there’s constant messaging that shortages may be coming.
Some experts are recommending retailers simply order what they reasonably think they can sell and hope that the items arrive on time. At this point, it’s mostly out of anyone’s control — and with major companies ramping up operations it’s possible the backlog could start to clear and shipments will start arriving.
The port of Los Angeles is also following the port of Long Beach by starting to operate more hours and days to hopefully help clear the backlog.
Having items shipped via alternative methods, such as air freight, can be an option, though it’s typically more expensive and there’s increased demand on those routes as well.
At the end of the day, it’s important to keep in mind that panic ordering can ultimately end up costing you more than it’s worth — and left with a lot of merchandise that no one wants (especially if all or some of it arrives after the holidays). There’s also considerations about where you’ll store the products you order once they do arrive.
It’s also not just shipping items that’s causing issues — many industries are facing backlogs in raw materials to make products. You obviously can’t ship products that haven’t been made yet, so in some cases it might simply be out of your hands until manufacturing catches up.