What: Retailers and brands are struggling to manage surging customer demand as the supply chain has yet to fully recover from COVID disruptions.

Why it is important: The demand for goods has come before shippers and carriers were ready, causing bottlenecks in the supply chain. This can cause major issues as brands and retailers prepare for the holiday season.

Although retailers believed they were making a comeback as the vaccine was rolled out and consumers were spending their stimulus checks, but there lie major problems in the supply chain that directly hit their bottom line. The economy is booming, but there are lots of factors causing roadblocks in the supply of goods. There have been raw material shortages, labor shortages, shipping container shortages, freight space shortages and facility closures.

Retailers will either have to pay more to get shipments in sooner, not necessarily on time, or they will have to simply wait and expect delays. Freights are estimated to cost 50% to 100% more compared to the year before. The shipping crisis is forcing retailers to pay steep prices as well as make supply chain decisions to ensure that they can stock their shelves with products.

Large players like Walmart have the leverage to buy up space on container ships, which leaves little to no room for smaller players that can’t afford it. Some retailers have even turned to air freight to avoid ports altogether.

'You can pay or you can wait': How retailers are navigating a shipping crisis