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Supply Chain Woes Could Hamper Amazon Prime Day

Supply Chain Woes Could Hamper Amazon Prime Day

June 21, 2021 at 01:33AM
by PYMNTS

Amazon‘s imminent Prime Day — the 2021 version of the event begins June 21 — may be undermined by global supply chain woes that already have been creating problems before the massive eCommerce shopping event, CNBC reports.

Problems CNBC cited include: shortages of shipping containers essential to much international trade and shortages of semiconductor chips, both attributed in recent months to a huge surge in consumer demand following the retreat of COVID-19 in much of the industrialized world and government stimulus programs that are giving potential consumers disposable cash. Other problems include shortages of plastics and in some areas, labor shortages.

“In 42 years in this business, I’ve seen a lot of challenges, but I’ve not seen anything like this,” Isaac Larian, whose company makes the popular Bratz doll, said, according to CNBC. One problem, he reportedly said, is that container ships are backed up significantly in the huge Chinese port in Yantian. Congestion at Yantian has been a problem since traffic was shut down in late May due to a cluster of COVID-19 cases there.

Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, reportedly told CNBC that problems in the global supply chain are making the distribution of goods slower and more expensive than usual.

A recent letter from the group to President Joe Biden, cited by CNBC, stated that of the industry group’s more than 16,000 members, more than two-thirds said they have had to added two to three weeks to expected transit time for goods they need.

“It’s not just one sector that’s being harmed as a result,” Gold reportedly. “Everyone is hurt because of it.”

CNBC cited Freightos, a cargo services provider, as having stated the combination of high demand and low supply led nearly half of respondents in a survey it conducted of small- and medium-sized Amazon vendors to indicate they expect shortages of goods on Prime Day.

“People may plan for Prime Day months in advance, but most sellers … don’t have the cash to bring in the inventory three months before,” Freightos Chief Executive Zvi Schreiber reportedly said. “They’ve got to pay for the inventory and then they’ve got to pay for the storage and they’re all working with slim margins. Now, with the shipping costs, they’re working with even slimmer margins. So, if you’ve got slimmer margins and you don’t have spare cash, you can’t just fill a warehouse three months in advance.”