NEWS & BLOG
Views: 7 Author: Site Editor Publish Time: 2022-08-15 Origin: Site
Reuters reported on Aug. 2 that the largest U.S. warehouse was full, and major retailers warned of slowing sales of clothing, electronics, furniture and other goods at their distribution center east of Los Angeles. At the same time, goods from Asia are still pouring in from across the Pacific, putting enormous pressure on U.S. supply chains.
First of all, in terms of shipping ports, the congestion of basic seaports in the United States during peak season is the norm. For the basic situation and distribution of U.S. ports, please refer to "Overview of U.S. Ports and China-USA Shipping". The latest news shows that various ports and shipping companies are actively taking various measures to ease port congestion.
U.S. Coastal Vessel Density Map
Take the ports of New York and New Jersey, which had the second-busiest month in history for freight activity back in May. This May totaled 845,305 TEU, an increase of 6.1% compared to 796,693 TEU in May last year. To this end, the Ports of New York and New Jersey will impose new quarterly container imbalance charges for ocean carriers. Container handling charges for excess empty containers that have been stored in the port for a long time will take effect on September 1, and are currently awaiting federal regulations. 30 days notice period.
Ports of New York and New Jersey
Maersk plans to cut the number of days imported containers stay at major U.S. ports to deal with port congestion. They have reduced the dwell time for imported containers from 14 days to nine days at the ports of Los Angeles and Long Beach, New York and New Jersey, Newark and Elizabeth. From Aug. 8, the company will begin transshipping containers with a dwell time of nine days or more, and is calling on shippers to pre-clear the cargo before ships arrive.
Supply chain pressures caused by the accumulation of cargo at ports are spreading from terminals to multimodal operations in the United States. Many shipments wait weeks at ports to arrive in the U.S. by train, truck, and more. Such congestion will even affect transfer stations in the United States, where containers at key transfer stations are piled up in mountains. The combination of truck and rail transport is the main way to relieve stress, but it also increases delivery time and transportation costs.
Los Angeles Port Railroad
Goods keep pouring into the port and from there into the already overcrowded warehouses. In port areas with vacancy rates below 1%, the warehouse market is even tighter. Specifically, according to Warehouse Quote's Warehouse Price Index (WPI), the vacancy rate in U.S. warehouses is currently hovering at 3%, the lowest level in decades, compared with 7.7% a decade ago, due to retailers Efforts are being made to "dispose of" excess items while ordering more stock to avoid shortages during the peak shopping season.
Warehouse owners say more and more sellers are looking to increase storage capacity, on the one hand to make it easier for goods to reach their destination, and on the other to hold inventory long-term to prevent shortages. Prologis Inc., the world's largest warehouse owner by square feet, said it would need another 800 million square feet of space to ease the current squeeze, said Melinda McLaughlin, senior vice president and head of global research at the company. The increased demand averaged approximately 138,000 square feet per customer of 5,800 customers.
Inventory shortages have become the norm in U.S. warehouses. As eMarketer analyzed, large operators and retailers like Prologis and Amazon may benefit by subletting the extra space, but more online retailers are suffering. Especially as the mindset of more and more retailers shifts, inventory and warehouse costs will continue to increase to avoid stock shortages.
The easiest way to solve a warehouse shortage is to add more space. Property developers completed 78.6 million square feet of new industrial space in the second quarter, down 6.9 percent from the previous quarter, CBRE data showed. A record 626.6 million square feet are under construction, and the real estate market is in a tight state. It may be difficult to effectively solve the storage shortage in a short period of time.
Some retailers have also opted for more "tricky" methods, such as converting company vacant land into temporary container warehouses, working with government officials and store owners to find new storage locations, and so on. However, whether these methods can work and whether they can really meet the needs remains to be further verified.
For cross-border sellers, due to the long time of cross-border transportation, they can't pin their hopes on these "quirky" means. They should comprehensively consider their own business forms and sales data, and consider the layout of multiple regions, multiple warehouses, and multiple categories. On the one hand, To ensure sufficient inventory, on the other hand, to ensure delivery timeliness. Of course, if the goods in the warehouse have accumulated, it is necessary to adjust the inventory in a timely manner by means of price reductions, clearance processing, etc. according to the categories of goods and consumption trends.