US retailers are taking steps to proactively avoid the depletion of goods caused by ongoing supply chain disruptions and soaring shipping costs, reports Tel Aviv's TipRanks.
Facing the triple threat of rising freight costs, port congestion, and potential stockouts, they're accelerating their holiday shipping schedules to ensure shelves are loaded with goods when the shopping season arrives.
A primary driver behind the early shipping push is the dramatic rise in shipping costs. The World Container Index reports a staggering 200 per cent surge in composite spot rates since November 2023.
This is mainly because attacks on ships in the Red Sea have forced longer routes, leading to port congestion and a squeeze on container availability.
'While it makes sense at an individual level,' warns Simon Heaney of Drewry Supply Chain Advisors, 'any herd behaviour can overwhelm the liner network and create a vicious cycle.'
Mr Heaney's concern highlights the potential downside of a mass early shipping rush, increased congestion, and potentially even higher rates.
While large retailers like Walmart and Target benefit from multiyear contracts with carriers, smaller players are feeling the pinch. Michael Short of logistics group CH Robinson, points out that fixed rates negotiated last year 'never really saw the light of day' due to the Red Sea crisis. Compared to those rates, it is more like a 75-100 per cent cost increase for smaller shippers.
SeaNews Turkey
Facing the triple threat of rising freight costs, port congestion, and potential stockouts, they're accelerating their holiday shipping schedules to ensure shelves are loaded with goods when the shopping season arrives.
A primary driver behind the early shipping push is the dramatic rise in shipping costs. The World Container Index reports a staggering 200 per cent surge in composite spot rates since November 2023.
This is mainly because attacks on ships in the Red Sea have forced longer routes, leading to port congestion and a squeeze on container availability.
'While it makes sense at an individual level,' warns Simon Heaney of Drewry Supply Chain Advisors, 'any herd behaviour can overwhelm the liner network and create a vicious cycle.'
Mr Heaney's concern highlights the potential downside of a mass early shipping rush, increased congestion, and potentially even higher rates.
While large retailers like Walmart and Target benefit from multiyear contracts with carriers, smaller players are feeling the pinch. Michael Short of logistics group CH Robinson, points out that fixed rates negotiated last year 'never really saw the light of day' due to the Red Sea crisis. Compared to those rates, it is more like a 75-100 per cent cost increase for smaller shippers.
SeaNews Turkey
