How The Supply Chain Is Already Affecting Holiday Shopping : Consider This from NPR The holiday shopping season is basically here. But a lot of things that Americans want to buy are not. Now the race is on to get goods off ships and into stores and warehouses — before it's too late.

NPRs Scott Horsley reports some retailers are already feeling the pinch from less inventory and higher shipping costs.

Even if goods do make it into the U.S., many are sitting in warehouses, which are bursting at the seams. NPR's Alina Selyukh explains why.

In participating regions, you'll also hear a local news segment that will help you make sense of what's going on in your community.

Email us at considerthis@npr.org.

Yeah, The Supply Chain Situation Isn't Looking Great For The Holidays

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AUDIE CORNISH, HOST:

The logjam at U.S. ports, it's not getting any better.

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CORNISH: In a warehouse on Houston's Industrial East Side, forklifts move pallets of T-shirts onto tractor trailers waiting to deliver them across the country. But if they have to load an entire shipping container, that's been more difficult.

RANDALL MORRIS: That is a container. When we go over to the port, they pick that thing up and put it on our chassis. A chassis is basically a piece of steel with wheels.

CORNISH: Randall Morris, chief operating officer of Canal Cartage Company, told NPR that his company, like so many others, is struggling through the latest supply chain glitch - a worldwide shortage of chassis. More on why in a bit.

MORRIS: We probably have about 250 on order that have been on order for the last year, and they just - they can't produce them fast enough.

CORNISH: And so it isn't enough for shipping containers to make it off ships. Those containers need chassis to be moved on land. And then there's the continued shortage of truckers and surging demand as we get closer and closer to the holidays. It's all been adding up to long hours for people like 32-year-old warehouse supervisor Josh Maddox.

JOSH MADDOX: I didn't see my kids for four days, which is very unusual for me. I'm home at night, you know, at least get to see them for a couple of hours before we tuck them into bed. But you get home at 7, 8, 9 o'clock at night and it makes it tough for sure.

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CORNISH: By the time these delays ripple through the supply chain to your average holiday shopper, it could mean you'll spend more and have fewer choices.

TIMOTHY BOYLE: You know, you may have to - instead of buying a large jacket in navy blue, you might have to buy a large one in green. There is merchandise around, but it's just not going to satisfy the American consumer the way they've been used to buying.

CORNISH: Tim Boyle is the CEO of Columbia Sportswear. He told NPR Americans have been kind of spoiled by the ability to buy whatever they want whenever they want. The supply chain that made that possible? Well, it's not going to be repaired overnight.

BOYLE: You know, over the last 30 years, American businesses and, really, global successful businesses have been operating on, you know, just-in-time inventory; don't carry too much inventory, have it all available the moment that you need it. And then when you get a disruption, as we have had in the last 18 months, yeah, it's going to be impacting us for quite some time I believe.

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CORNISH: CONSIDER THIS - the holiday shopping season is basically here, but a lot of things that Americans want to buy are not. And the race is on to get those goods off ships and into stores and warehouses before it's too late.

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CORNISH: From NPR, I'm Audie Cornish. It's Monday, November 15.

It's CONSIDER THIS FROM NPR. So what can a president do about any of this?

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PRESIDENT JOE BIDEN: At one point, you're going to be mad at me because there's going to be so much work, you're going to say, God, why...

UNIDENTIFIED PERSON #1: It's never enough.

UNIDENTIFIED PERSON #2: Never enough.

UNIDENTIFIED PERSON #3: Never enough.

UNIDENTIFIED PERSON #4: We will not be mad at that.

CORNISH: Well, for starters, President Biden promised more jobs and busier ports during a visit with Baltimore port workers last week. That, he said, will be one result of his trillion-dollar infrastructure plan, which he signed into law Monday. Here's what Biden said about it in Baltimore.

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BIDEN: I'm going to create good-paying union jobs - union. Not good - not $12 an hour, not $15 an hour; 45 bucks an hour and up with good benefits so you can raise a family on and build the middle class out.

CORNISH: Biden's infrastructure package includes billions of dollars for upgrading ports, deepening harbors for larger cargo ships and modernizing waterways. Biden said all of that would make the supply chain more resilient to future disruptions.

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BIDEN: It's about taking a long-term view of our economy to deliver lower cost, more jobs and ensure our shelves are stocked with product.

CORNISH: But billions of dollars in infrastructure improvements aren't going to happen overnight in the meantime.

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BIDEN: When you go to order a pair of sneakers or a bicycle or Christmas presents for the family, you're met with higher prices and long delays or they say they just don't have any at all. The reason for that last year was - has a lot to do...

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CORNISH: To deal with that in the short term, it's not clear there's much for a president to do. Biden did say major companies - FedEx, UPS, Target and Walmart - have committed to operating 24-7 to keep holiday shelves stocked. But what if you're a smaller or even mid-size retailer? As NPR's Scott Horsley explains, it's those business owners and their customers who are really starting to feel the pinch.

SCOTT HORSLEY, BYLINE: Bonnie Ross (ph) works for a small clothing company that sells jeans, fleece and workout gear, mostly to discount stores like Ross and Burlington Coat Factory.

BONNIE ROSS: We work on high volume, very, very tight margins.

HORSLEY: The company is called Nothin' But Net. This year, though, getting its products from factories in Asia to stores in the U.S. has been nothing but aggravation at every step along the way.

ROSS: First, I couldn't get the containers to get them out of China. And then I couldn't get them on a boat. Now they finally get here, they're sitting at the port for God knows how long. And now I can't have a truck to pick it up because there are no trucks. Now I got a whole new education. Do you know what a chassis is?

HORSLEY: A chassis, as Ross learned the hard way, is the trailer that a shipping container rests on when it's being pulled by a truck. Right now, it's hard to find an available chassis. A lot of them are stuck under empty containers, and that means it's taking longer to get full containers out of port.

PETER GRIMM: I have drivers who are frustrated right now that we can't move more containers. We do what's necessary to move cargo because if we don't, we don't eat.

HORSLEY: Peter Grimm runs the trucking company TK Transport in Compton, Calif. Most of what he's delivering these days is bad news. Ross had one container that was stuck at the port for a full month.

ROSS: We had one trucker that wanted us to pay $5,000 to go and pick up my goods from the port. I don't make these kind of margins. Like, I'm not Tommy Hilfiger. If they have to pay $3 more a garment, they don't care. But for us, it's everything.

HORSLEY: Eventually, Ross managed to talk a few containers out of the port, but eight more are still in transit, and her discount store customers are getting impatient. In some cases, Ross is bypassing overcrowded distribution centers and shipping products directly to retail stores. Otherwise, she says, they might not get there before Christmas.

ROSS: We're at the point where, you don't ship now, it's not going.

HORSLEY: And those delays come at a serious cost. Bobby Djavaheri runs a company that imports small appliances like air fryers and pressure cookers. Some people buy those things throughout the year, Djavaheri says, but the holiday season is critical.

BOBBY DJAVAHERI: We had one retailer who bought 50,000 air fryers from us last year for a Black Friday promotion. They did so well, and they came back to us for Black Friday 2021. Now, they're going to have to delete their promotion because the goods aren't going to get there in time; talking about over $1 million worth of goods. It's a disaster.

HORSLEY: As if dockside delays weren't bad enough, one of Djavaheri's containers actually went overboard; one of more than 100 that toppled off a cargo ship in rough seas off the coast of British Columbia last month as the ship was waiting to get into a crowded port.

DJAVAHERI: That's all I needed. My dad's 88 years old. He's been doing this for 50 plus years. He can't even fathom what's going on. That's how crazy it is.

HORSLEY: A big part of what's driving this crazy traffic jam is booming demand. Containers are backing up in large part because Americans are buying more stuff than ever before; an estimated 26 million import containers this year.

While some of that merchandise may not reach its destination by Christmas and some items will be out of stock, you're not likely to find row after row of empty store shelves. Many retailers started stocking up early in anticipation of a busy season. Danny Reynolds runs a clothing store in Elkhart, Ind., that just celebrated its 90th anniversary.

DANNY REYNOLDS: Our store started during the Great Depression in 1931. So I always say we were built to last, but this has all been different.

HORSLEY: Reynolds says deliveries this year have been erratic. Merchandise he expected to get in mid-summer suddenly showed up in October. Luckily, it wasn't swimsuits, and he's not sending anything back. Reynolds' store is well stocked for the holidays, and he thinks a lot of people will be eager to buy.

REYNOLDS: From an inventory standpoint, we're ready. If they don't come, boy, am I going to have a big clearance sale (laughter) early next year.

HORSLEY: Reynolds is already thinking about ordering merchandise for next spring and summer. There's little sign the cargo traffic jam will be cleared by then.

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CORNISH: NPR chief economics correspondent Scott Horsley.

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CORNISH: Now there's another link in the supply chain mess that we haven't talked much about - warehouses. Just about everything that you buy - your couch, your phone, your floorboards - well, they moved through a warehouse before they came to you. But right now, many of them are bursting at the seams, which means there's no place to put new shipments of goods that are arriving in the U.S. each day. NPR's Alina Selyukh has more.

ALINA SELYUKH, BYLINE: Doug Kiersey has been building, buying and leasing warehouses for almost 40 years. He's never seen a time like this.

DOUG KIERSEY: It is incredible. It's completely unprecedented.

SELYUKH: Kiersey is the president of Dermody Properties, which owns warehouses used by some of the country's largest retailers

KIERSEY: In some markets, we're over 99% occupancy. Think about it.

SELYUKH: Ninety-nine percent occupancy - meaning basically all the warehouse space is claimed, packed to the gills. So how did that happen? Here's Colorado State University supply chain management expert Zac Rogers.

ZAC ROGERS: I don't think everyone realizes that it's not that, oh, the system's broken, they're just totally, totally overwhelmed.

SELYUKH: Rogers says warehouses went into the pandemic already pretty busy. Then things started closing - factories, ports, but also stores. People cut back on shopping, and so stuff began piling up. And then, when everything reopened...

ROGERS: We start to see this rush of inventory coming in. Warehouses are already sort of full. And now, they're really, really full. And you can see every month for the last 18 months, there's been less available warehouse space than there was the month before.

SELYUKH: Warehouses are struggling with all the same disruptions you've heard about the supply chain - not enough workers to get stuff in and out faster, not enough railcars and truck drivers to haul things. But above all, there's just an eye-popping extraordinary amount of goods. Retailers have been importing at record levels month after month.

ROGERS: Essentially, you kind of see this doomsday prepper mentality in all of these companies where, normally, they've been as lean as possible.

SELYUKH: Companies are trying to do two things. They're scrambling to bring into the U.S. as much as they can while they can because they've seen what factory and board disruptions can do. But fundamentally, they're trying to keep up with our record surge in shopping. People have unleashed all their cooped-up pandemic anxiety and all the money not spent on traveling and going out on buying stuff - furniture, clothes, computers; ordered online, delivered within days. Here's Doug Kiersey.

KIERSEY: We took five years of e-commerce growth and jammed it into one year, and we turbocharged a trend. And we weren't really prepared for that.

SELYUKH: Warehousing companies have been building as fast as they can. In fact, it was the one type of commercial construction that boomed all through the pandemic. But setting up fancy buildings - millions of square feet with conveyor belts and robots and all the bells and whistles - takes time. Plus, prime warehousing space is tricky and limited. It used to be that logistics real estate went kind of like this.

KIERSEY: Hey, let's go find the next corn field out in the exurbs, go align ourselves with the next interchange on the freeway, and that's where we'll build a big building.

SELYUKH: Now, that's too far. Retailers want to get your package to your door in the least amount of time, and that means jockeying for storage in expensive and crowded urban and suburban areas. Warehouse builders were just figuring all that out when the pandemic shopping raised the stakes.

KIERSEY: So demand has come up against a static supply.

SELYUKH: In a matter of a year, warehousing rents in some markets have doubled. Brand-new buildings that would normally sit vacant for months are selling space before they're finished. The other day, Kiersey had to do something unheard of - turn away an old client as three companies vied for the same warehouse.

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CORNISH: That's NPR business correspondent Alina Selyukh. And earlier this episode, you heard reporting from a warehouse in Houston. Well, that came to us from NPR's Southwest correspondent John Burnett. We want to say thanks to John and to NPR's Scott Horsley, Ammad Omar and Rafael Nam for their help with this episode.

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CORNISH: It's CONSIDER THIS FROM NPR. I'm Audie Cornish.

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