FTC launches probe into supply chain snarls

“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber. I am hopeful the FTC’s new study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,” Chairperson Lina Khan said in a statement. “The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities.”

In addition to seeking a better understanding of the reasons behind the disruptions, the study will examine whether supply chain disruptions are leading to specific bottlenecks, shortages and anticompetitive practices, or contributing to rising consumer prices.

The orders require the companies to detail:

• Primary factors making it difficult to obtain, transport and distribute their products.
• The impact disruptions are having in terms of delayed and canceled orders.
• Increased costs and prices.
• Products, suppliers and inputs most affected.
• Steps the companies are taking to alleviate disruptions.
• How they allocate products among their stores when they are in short supply.

The FTC also is requiring the companies to provide internal documents regarding the supply chain disruptions, including strategies related to supply chains; pricing; marketing and promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market shares.

In addition, the agency is soliciting voluntary comments from retailers, consumer goods suppliers, wholesalers and consumers regarding their views on how supply chain issues are affecting competition in consumer goods markets. 

Freight transportation prices have jumped in the past year because of strong demand for imported goods and limited capacity across all transport modes.

The CEOs of Walmart and Kroger were among a group of business leaders who participated in a roundtable meeting with President Joe Biden at the White House on Monday to outline how their companies have overcome supply chain bottlenecks and prepared for the holiday shopping season. The group told the president that they had built up solid inventory levels, especially for seasonal items, by diversifying their supply base, sourcing new products and planning ahead on international shipping.

Walmart chief Doug McMillon said the retailer has seen improved cargo flows through the ports of Los Angeles and Long Beach since the Biden administration started pushing stakeholders last month to cooperate more on finding solutions to the gridlock caused by record import volumes.

“Retailers are experiencing a double whammy and getting hit from both a cost and service perspective. This has affected every industry and every mode of transportation. Ports continue to experience backlog and domestic transportation such as trucking has suffered due to the lack of drivers and labor available and equipment shortages,” said Fabricio Faggiani, senior consultant with procurement specialist Proxima.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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