Nike and Costco warn of product bottlenecks and delays – News on World

US sporting goods giant Nike and US retail giant Costco say they are facing product bottlenecks and delays due to global supply chain issues.

Nike said production and delivery of its shoes would have an impact through next spring as the company grapples with shipping issues and a labor shortage in Asia.

Meanwhile, Costco has again imposed restrictions on items such as toilet paper.

It is said that amid Covid fears, customers are back to stocking up, but it is also struggling to get goods to its stores.

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On Thursday, Nike said it had lowered its sales outlook for the year due to the ongoing disruption.

“We are not immune to the global supply chain headwinds that challenge the [manufacture] and transport of products around the world,” said CFO Matthew Friend.

“We assume that all regions are affected by these factors.”

The company’s factories in Vietnam and Indonesia, which make three-quarters of its shoes, have been hit by local lockdowns. In Vietnam alone it cost the company 10 weeks of production time this year.

The time it takes to get your products from Asia to North America has now doubled from around 40 to 80 days. Nike has also seen increases in transit times in North America, Europe, the Middle East and Africa due to “port and rail congestion and labor shortages”.

Costco – a members-only retailer – announced Thursday that it was reinstating restrictions on purchases of key items such as toilet paper, bottled water and some cleaning products.

It said this was partly due to a resurgence in panic buying, but it is also struggling to find trucks, drivers and shipping containers to bring goods to its stores.

The retailer has even chartered three of its own ocean liners to transport products between Asia and North America in the coming year.

“Factors that put pressure on supply chains and inflation include port delays, container shortages, Covid disruptions, bottlenecks in various components, raw materials and ingredients, labor cost pressures and truck and driver shortages,” said Costco’s CFO Richard Galanti.

“Several major brands are demanding longer lead times and, in some cases, having difficulty finding drivers and trucks at short notice.”

Since the reopening of economies, retailers around the world have faced widespread disruption amid rising demand for imports.

In the US, it has contributed to shortages of children’s toys, wood, new clothes and pet food, while driving consumer prices higher.

Brands such as the toy manufacturer Hasbro and the sporting goods giant Adidas are warning of possible delivery bottlenecks during the important Christmas season.

And last week, 73 ships were forced to line up at two major U.S. ports, Long Beach and Los Angeles, as port workers scrambled to clean up the backlog. Before Covid, it was unusual for more than one person to be waiting for a berth.

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