The global supply chain process is akin to a well-orchestrated performance with individual players comprised of freight forwarders, third-party logistics providers, World Cargo Alliance (WCA) agents, manufacturers, distributors and wholesalers, and finally, retailers.
Each plays a vital role in assuring that needed goods travel from their origination point to their final destination on a timely, careful, well-orchestrated journey. One analogy? Think of the famous 1950s-era Rat Pack performing in Las Vegas; each performer was exceptional, yet different – but all of them contributed to the ultimate performance delivery.
In this series of blogs, we’ve looked at each of the multiple stage players along the global supply chain. In this, our final installment of the series, we focus on the final link in the supply chain – retailers who sell goods to the general public.
Part 6: Front-Line Retailers Sound the Keynote for the World’s Supply Chains
When it comes to global business, retailers are on front lines. As the U.S.’ largest private-sector employer, they represent one in four U.S. jobs and contribute $3.9 trillion to the nation’s annual GDP. They’re a barometer of consumer spending on one side, the health of the supply chain on the other. Retailers need both eager customers to spend money, and equally important, a well-honed supply chain process – keeping goods flowing onto their retail shelves. Fortunately, in 2023, both are showing positive signs.
For example, a tentative agreement was reached earlier this summer between the International Longshore and Warehouse Union and the Pacific Maritime Association. Negotiations have been underway since the labor contract initially expired in July 2022. “On behalf of the retail industry, we are relieved to see the parties have come to a tentative mutual agreement on a long-term contract for labor operations at the West Coast ports, ending over a year of negotiations and uncertainty,” emphasizes Matthew Shay, president and CEO of the National Retail Federation (NRF).
“A new agreement provides stability to the supply chain and assurance to the millions of businesses and employees who rely on smooth and efficient operations from the West Coast ports,” he says. In addition, as port conditions globally continue to improve, other supply chain moves too are having a positive effect. Third party logistics firms such as Prime Logistics are keeping goods flowing for their customers by use of new technology, precise tracking and diverse sourcing. Distributors and wholesalers have also sought out innovative solutions to keep goods moving. All that’s positive for the supply chain.
On the retail sales side, the U.S. Census Bureau reports that overall retail sales in May 2023 were up 0.3 percent from April and up 1.6 percent year over year. In April, sales were up 0.4 percent month over month and up 1.2 percent year over year. Shay adds: “Consumers continued to spend on household priorities in May, supported by gains in the job market and wages.”
While May is typically a strong month for retail as spring shopping hits its peak, recently released reports show that above-average temperatures and below-average precipitation during May 2023 also played a favorable role in consumer decisions to spend. In addition, “retailers recognize the ongoing pressure on cost-sensitive consumers and are offering competitive pricing, a wide product mix and convenient shopping options to help stretch family budgets,” notes Shay.
The good news is that it was a “positive report with no sign of an abruptly slowing economy despite what has happened with inflation and interest rate pressures,” stresses Jack Kleinhenz, NRF’s chief economist. So, even though shoppers dialed back in some categories on a year-over-year basis, the numbers show that consumers still have the capacity to spend with job growth and wages providing buoyancy. That said, inflation continues to take a bite out of consumer income.
As those consumers head to shops, stores and malls, it’s clear that retailers play an invaluable role in the supply chain process. If consumers have abundant food on the table, watch entertainment on a new HDTV wall-mounted system, redecorate their home with new soft goods, or purchase electronics, furniture or culinary items, retailers – the last important link in the global supply chain – should be credited for making that happen, day after day. Let’s hope it continues through the rest of 2023.
About Prime Logistics Group
One of four divisions of Prime Group, an international logistics services conglomerate founded in Ecuador in 2001, Prime Logistics Group serves to streamline, optimize, and expedite freight to and from the U.S. for a wide range of major industries.
With offices in Miami, New York, Los Angeles, Bogota, Quito, and Amsterdam, Prime Logistics capitalizes on its long-time relationships with the major air carriers and ocean lines to offer competitive rates in securing ample space to destinations all around the world.
For information, call 305-592-2044 or visit WWW.PRIMELOGISTICSGROUP.COM.