Storm aftermath threatens retail supply chain

When Hurricane Sandy hit the East Coast last week, many expected local destruction and delays throughout the supply chain, and those effects are being seen now as retailers struggle to get their products on shelves and to consumers. They are now faced with the challenge of making up for lost sales, keeping business strong through the holidays, and ensusing consumers are pacified if they face shipping delays and product shortages.

Retail logistics a challenge
Logistical operations are a serious challenge for retailers as they struggle to get things moving after Hurricane Sandy stalled their shipping schedules. Many businesses have had to deal with their regular routes being completely shut down from excessive flooding, downed power lines and closed roads. Some retailers are unable to receive shipments or provide consumers with products they ordered before or during the storm. Even if routes weren't closed, some would still have trouble getting their goods where they needs to be because of gasoline shortages on the East Coast.

Companies that don't primarily rely on trucks and vans to move their products aren't in the clear. They are struggling to get retail goods where they need to be due to port closures, flight cancellations and delays and suspended rail service. This is making it hard, if not impossible, for retailers to restock in-demand goods in a timely fashion and ensure they have enough to satisfy consumer demand.

Timely shipping a problem
With retailers facing low stock and having a hard time getting additional product from suppliers, it may have an effect on their online shopping - something many retailers have been hoping will increase their business sales.

With routes closed and fewer goods in stock, online shoppers may experience delays receiving products they ordered online. Retailers are telling consumers to expect shipping delays due to route closures and flooding. Some are trying to get around the problem, and The New York Times reported that FedEx has rented fuel tankers for its delivery trucks to avoid the gas shortages and Ryder is seeking rental trucks to increase its capacity.

Some retailers struggling to meet demand are requesting products be shipped directly to their stores, rather than corporate warehouses for storage. By having goods send directly to the store, retailers are able to have more in stock and ensure more consumers are getting what they need in a timely fashion rather than waiting for additional products to be sent from a warehouse.

Additional retail procurement could be tricky
Hurricane Sandy hit just as the traditional holiday shopping season was about to get underway, and it could put a serious dent in holiday shopping. Many stores lost sales when they closed their doors for the storm, and shoppers weren't out and about making their holiday purchases during the violent weather. Retailers that lost goods during the storm, faced shipping delays or were unable to track down their products after shipping was thrown off schedule may now be limited on holiday inventory for customers.

Stores and warehouses that experienced flooding or looting have lost inventory that may have been critical for their holiday sales. Due to the closed routes, shipping delays and fast-approaching holiday season, they will likely need to pay extra for a timely production turnaround and expedited shipping to receive more of these essential goods in time for Black Friday and Thanksgiving shopping. This may result in an increase in consumer prices or shipping costs if retailers are even able to get the goods they seek in time for holiday shopping.