Supply Chain Showing Signs of Life, Says Samsung, Walmart

The supply chain is picking up speed, according to business leaders.

By Alan Wolf, YSN

  • Samsung reports “significantly reduced” port delays
  • Walmart’s inventory up 11 percent over last year
  • Declines seen in shipping costs, container congestion

Supply chain bottlenecks that threatened to constrain the holiday selling season appear to be easing, executives from Samsung and Walmart said.

Speaking last week at a White House summit on the status of holiday shopping, KS Choi, president/CEO of Samsung Electronics North America, noted that his company is “committed to ensuring U.S. consumers have the appliances and electronics they want and need.” Making good on a earlier promise, Samsung has “ramped up our capacity and [has] significantly reduced our backlog at the ports of L.A. and Long Beach,” he said.

Joining the conference via video, Walmart president/CEO Doug McMillon ticked off a list of indicators suggesting that the nation’s logistical ice dam is indeed melting.

“While we’re all concerned about the supply chain, we have more inventory than we did a year ago and have the inventory we need to be able to support the business,” he said. “And we are seeing progress. The port and transit delays are improving.”

Specifically, Walmart’s inventory levels are up nearly 11 percent over last year’s holiday season, the CEO said, and its throughput at container ports is up 26 percent nationally and 51 percent at California’s critical Los Angeles and Long Beach facilities, which account for 40 percent of America’s incoming sea freight.

McMillon — along with other business leaders including Choi and Best Buy CEO Corie Barry — attributed the improvements to a host of factors, including extended lead times; rerouting shipments to alternate ports; sourcing new products; diversifying their supplier base; and partnering closely with current suppliers.

McMillon also pointed to President Biden’s jawboning efforts to unclog the ports, which have led to the elimination of penalties for weekend and nighttime container pickups, and financial incentives to move cargo off docks more quickly. As a result, the number of containers sitting on docks for nine days or more fell by 41 percent in November, The White House said, while  the executive director of the Port of Long Beach told CNBC that the number of cargo ships sitting idly offshore fell from 111 to 61 vessels within two weeks last month.

In addition, the Department of Transportation has temporarily eased restrictions on the number of hours that truck drivers can work to help increase the flow of goods, while the Federal Maritime Commission, under an executive order by the president, pledged to crack down on anticompetitive pricing by ocean carrier alliances. The Biden administration said shipping costs fell 20 percent in November, citing data from container freight index Freightos.

“There are a few items, as there are every year with the hottest toys or things in electronics, that we wish we had more of,” added McMillon. “But generally speaking, we’re in good shape and really appreciate the partnership.”