A worker assembles a box for delivery at the Amazon fulfillment center in Baltimore, Maryland, U.S., April 30, 2019.
Clodagh Kilcoyne | Reuters
Amazon sellers who had hoped for an easier Prime Day after 2020’s pandemic-driven chaos aren’t likely to catch a break this year.
The company’s two-day discount bonanza kicks off on Monday. It’s coming as the retail industry is grappling with widespread supply chain issues that are making it more challenging to stock stores and distribution centers and keep up with consumer demand.
Several cascading issues are hitting businesses at once. The global supply chain is still feeling the ripple effects of the Covid-19 pandemic, which forced many factories to shut down temporarily amid worsening outbreaks of the virus. Supply chains have been further disrupted by shortages of shipping containers and air freight capacity, along with materials like semiconductors and plastics. Labor shortages have caused major backlogs throughout the system.
A Covid-19 outbreak in the southern Chinese province of Guangdong has compounded the problem. Local officials have introduced restrictions, such as limits on vessel entry, to limit the spread of the virus. That means one of the world’s busiest ports, the Yantian International Container Terminal in Shenzen, has shrunk in available capacity.
Small- and medium-sized Amazon sellers who import their products from China are on edge as a result of global shipping snafus. Many businesses stocked up on as much inventory as they could months ahead of Prime Day.
Isaac Larian, the toy maker behind the popular Bratz brand of dolls, said his company MGA Entertainment is in good shape for Prime Day because it started planning many months ago. That planning likely paid off, as Larian said he’s now looking at hundreds of containers of goods tied up at shipping ports in Yantian, while shipments that are on their way to the U.S. are taking weeks longer than expected to arrive.
“In 42 years in this business, I’ve seen a lot of challenges, but I’ve not seen anything like this,” Larian said.
These issues are adding “increased time and cost” to the global supply chain, said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, a trade group.
Across the NRF’s 16,000-plus members, more than two-thirds of members said they’ve been forced to add two to three weeks to their supply chains, the NRF wrote in a recent letter to President Joe Biden calling for action on the port challenges. All NRF members reported to the group that their costs had increased as a result of the disruptions.
“It’s not just one sector that’s being harmed as a result,” Gold said. “Everyone is hurt because of it.”
Because consumer demand remains high and inventory supply is limited, items could run out more quickly than in years past. Cargo marketplace Freightos surveyed 177 small- and medium-sized businesses who sell on Amazon and found that just over 75% of…