West Coast: Congestion felt through 2nd Quarter
Retailers were impacted by the West Coast contract negotiations that resulted in a later start to the spring season. This will cost the U.S. retailers an estimated $7 billion this year.
From JOC:
Many major retailers say they’ve had to cutback calendars and build up inventories well in advance in the second quarter, or risk getting burned even worse.
From Joseph B. Parsons – Michael Kors Executive Vice Presient:
Approximately a third (15% inventory increase YoY) of the increase was related to early shipments of fall merchandise versus the prior year as we wanted to mitigate potential risks related to the West Coast port delays.
JOC also reports that all the congestion at the West Coast ports will cost peak season cargo share; but they could recoup their lost market share next year and beyond if they address their congestion and labor problems.
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