Shipping lead times fall 23% as companies order less goods with more frequency
Chart of the Week: Ocean TEU Booking Lead Times - All ports to the USA SONAR: Container Atlas
Order lead times — the time between order placement and expected ship date for containerized imports — have dropped 23% since late April as supply chain managers are forced to change their strategy in an economic environment that is once again in a transitional state.
Last week, Target reported that it had essentially too much inventory on hand and needed to “right-size” its stock. This was an inevitability for many retailers who are struggling to accurately predict what the consumer will do in the post-pandemic environment.
Many macroeconomic figures, like unemployment and retail sales, still suggest that the economy is doing quite well. The difficulty arises in trying to predict when consumption will slow and at what rate that will occur.
Looking at traditional macroeconomic figures like those mentioned, you will think that the consumer is still doing just fine. However, if you look at near-real-time data like tender volumes (OTVI) and the monthly reported Logistics Managers’ Index that measures inventory growth, you will see that shippers are slowing down domestic transportation shipping due in part to record inventory growth that started in January.
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