Many supply chain logistics experts believe that retailers will experience a decline this holiday season. Fall and winter items are not arriving on time to meet the demands this holiday season and into 2023.
Ocean shipping brokerage companies have started to experience a 20% decline in their ocean freight orders due to an oversupply of inventory and potential rail strikes. Consumers still struggle to deal with the highest inflation rate in 40 years. Retail sales remained unchanged in September on cars, gasoline, food, and everyday goods despite the increase that economists expected.
A Rail Strike in the Future
The potential for a rail strike remains concerning for businesses. A second labor union recently rejected a potential agreement between freight companies that was spearheaded by the Biden administration. Union members appear upset over representatives signing off on the presidential board’s recommendations because they simply did extraordinarily little to improve the railway worker’s working conditions.
At this point, all the 12 unions must agree to negotiate the new contracts, or a strike could occur which will have devastating results on prices and the supply chain. A strike could occur in mid-November and if it happens then Congress will likely get involved.
A Rail Strike and the Supply Chain
A strike will hit the supply chain hard. One railcar holds about four to five truckloads so if the trains stop transporting perishable goods, then prices may climb even higher.
Many believe that retail data false on consumer spending with many consumers carrying high credit card debt. Any uptick in spending has been the result of retailers providing special sales on items due to excess inventory.
The longshoremen continue to watch what is happening with the rail union because they also remain in negotiations and any fallout from a rail strike will create a long-reaching fallout.
Sobel Network Shipping Co. Inc. remains vigilant about the current state of the supply chain. Please contact us to learn more.