Getting late early: COVID, shortages to complicate holiday shipping 

Last holiday shipping season was fraught with delays. A mass surge in online orders created shipping backlogs as consumers turned to e-commerce amid the pandemic.

Up to 700 million packages faced potential shipping delays as orders exceeded shipping capacity by 5%, according to San Francisco-based Salesforce.

With the peak shipping season for 2021 already underway, supply chain disruptions will likely impact retailers and e-tailers ability to get their hands on products ranging from toys to electronics due to such factors as COVID-related slowdowns, labor shortages and severe weather impacting key cargo ports in China. There have been COVID outbreaks too in key Chinese ports, including Yantian in June, adding to backlog

"If the headline last holiday season was the overcapacity of shipping for the last mile of delivery, this year’s headline will likely be around the supply chain bottleneck coming into and through the ports," says Rob Garf, vice president and general manager of retail at Salesforce, a customer relationship management platform that provides ecommerce solutions for retailers.

Additionally, the worldwide labor shortage is causing delays for unloading shipping containers — used to move goods from overseas factories — once they reach other ports along the way and need to be "reloaded into the domestic supply chain," Garf says.

Making matters worse, the costs of shipping containers are drastically rising — three to 10 times higher than pre-COVID — due to demand. Small importers and retailers face limited availability as some larger retailers are pre-buying space on the containers in anticipation of the holidays, Garf says.

"The gap’s growing between the mom and pops and the Tier 1 retailers," he says.

Roberta Perry, owner of ScrubzBody Skin Care Products, which has a storefront in Farmingdale and sells online, has felt the supply chain crunch.

She gets key supplies like jars and caps for her scrubs, lotions and creams from an upstate distributor who obtains them from China.

"Before COVID I would order supplies on Monday and get them by Thursday," she says. "Now it’s taking 3 ½ to 6 months."

As a result, she’s been overordering supplies, doubling those costs "for fear I won’t have enough," Perry says.

She’s even had to turn her massage room into a storage room to squirrel away extra supplies. To reduce her risk of coming up short, she’s added three other vendors and switched to alternative parts for her products. Instead of hard-to-get pumps for lotions, for example, she’s using flip caps.

The supply chain crunch will make it harder for consumers to find some products this year, says Marshal Cohen, retail industry expert at the NPD Group, a Port Washington-based market research firm. Also, higher shipping costs will result in slightly higher product prices and consumers may see less free shipping than in the past, he says.

For retailers, the bad news is they have to buy more product so they don’t run out, but the "good news is they can charge more," he says.

"Consumers have shown us they’re willing to pay more money and be less focused on promotion" — such as discounting — for the product they want," Cohen says.

But retailers need to have enough product in order to sell it so they must be willing to invest in the necessary supplies.

"Start now trying to get extra supplies," says Rich Michals, Jr. president of Parcel Management Auditing and Consulting in Farmingdale.

Even starting early, there’s no guarantee retailers will get inventory in time, he says. But the longer you wait odds worsen.

He says smaller retailers and e-tailers could consider promoting existing inventory, perhaps offering more attractive pricing on those products, since new product may be scarce.

"This holiday season will be a collision between desire and desperation," meaning desire to fullfill orders and desperation to get product to fill them, Michals says.

Meanwhile, both UPS and FedEx in emailed statements to Newsday said they’re preparing for another busy holiday season.

FedEx said, "We’re accelerating our efforts to bolster capacity." That includes investments in technology, recruiting "tens of thousands of team members" across its network and adding for FedEx Ground "16 new automated facilities slated to be operational in time for the holiday season," as well as expanded facilities for FedEx Express.

UPS is also adding technology and infrastructure and hiring seasonal employees including drivers, driver helpers and package handlers. It is also expanding its network with additional rental vehicles, including drivers using personal vehicles, and will also expand its air fleet. UPS Airlines operates 282 company-owned jet aircraft and 294 leased and chartered aircraft, but by December will be "adding another six jets to the fleet and also charter several dozen additional aircraft to boost capacity.