Covid-19 has driven the global supply chain to a near crisis point, with huge delays in the supply of many types of goods across borders – especially to remote countries like Australia.
With Christmas looming, supply chain disruptions couldn’t come at a worse time for retailers – or any other type of business which traditionally sees an uptick in demand for products and services over the Christmas-New Year period.
With the dramatic reduction in air cargo capacity worldwide due to border closures for travellers, shipping companies have been overwhelmed with demand. Covid outbreaks at ports in China and backlogs in major hubs like Los Angeles and Rotterdam have worsened the problem. That has sparked price rises for international shipping.
Small orders are worst affected because when airfreight companies put extra capacity on, they are prioritising large orders – so the smaller the package, the higher the cost as prices frequently adjust to balance insufficient demand.
That means that retailers and other businesses who source products locally are in a better position to avoid stock shortages and price increases – because stocks are already in warehouses within Australia. It’s the perfect time to seek out local suppliers and potentially onshore their sourcing.
If you are considering ordering products from abroad – and you have not as yet – beware they will be unlikely to arrive in time now.
On-time delivery chance now “zero”
Super Retail Group chief executive Anthony Heraghty told Fairfax that even if retailers are buying stock eight to 12 months out from overseas suppliers, “the chances of it arriving on time is zero”.
“If it’s not in the shed or on the shelf today, for Christmas this year I think the chances of it being (in stock) come that peak time is incredibly remote.”
Jamie Dixon, TMX’s director of supply chain, told Inside Retail this week that home and leisure goods, furniture and electronics coming out of Asia are already being delayed by up to six weeks and with order volumes increasing that is likely to get worse.
“With demand in Europe and North America rebounding very strongly, there is a significant risk that Australian retailers won’t be able to get their hands on global-branded products, or at least as much as they like.”
He told Inside Retail that retailers should aim to get their hands on stock as soon as possible. “A retailer’s availability of stock will ultimately become a competitive advantage come Christmas time.”
The same scenario is playing out worldwide. In South Dakota, where life is substantially back to some form of post-Covid ‘normal’, kitchen supply store owner Kirsten Gjesdal “had long taken for granted her ability to order whatever she needed and then watch the goods arrive,” reported the New York Times – “without any thought about the factories, container ships and trucks involved in delivery”.
“It’s not getting back to normal”
She has given up on stocking placemats, tired of telling customers that she can only guess when more will come. A pot lid she ordered eight months ago turned up only days ago and she reports becoming used to paying surcharges on top of already soaring shipping costs for orders.
As a result, Gjesdal has already placed orders for traditional Christmas stock like wreaths.
“It’s nuts,” she said. “It’s definitely not getting back to normal.”
So, never before has it been more important to stock up early for Christmas stock or business needs.
The best chance of sourcing stock now is to order from within Australia.
Fortunately, TradeSquare has more than 800 suppliers on our platform able to supply products to any Australian-registered business at wholesale prices.
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