Costco and Walmart limit toilet paper as supply chain problems worsen

Stores across America have empty shelves thanks to a series in supply chain problems that are prolonging inflation and could stretch into the new year, with some retailers like Costco and Walmart limiting the amount of toilet paper people in fear that they may soon run out.

More than 60 cargo ships are waiting to dock in California, carrying hundreds of thousands of containers, and may be stuck for months in a traffic jam after arriving from China and Asia.  Millions of dollars of American goods are still sitting in warehouses in China, awaiting shipment.

There are similar problems with homegrown goods that can’t be transported quickly enough by truckers or on freight trains. 

The problems – which have tormented business owners for months – are now laid bare to American shoppers who are confronted with poorly stocked stores and rising prices on the items that they can find. 

Some toy company CEOs are telling parents to buy their kids’ Christmas gifts now to avoid disappointment. 

This past weekend, Costco and BJ’s Wholesale Club were limiting the amount of paper goods customers could buy in parts of Long Island. In Bellport, a town in southern Long Island halfway between the Hamptons and New York City, shoppers were limited to two bundles of toilet paper each. 

There is no immediate end in sight. Inflated COVID unemployment payments ended in September which many hoped would drive a surge in jobs, but the response has been sluggish at best. Last week produced the worst jobs report of Biden’s presidency, with only 194,000 jobs added – far short of the 500,000 that were expected.  

Federal Reserve Chairman Jerome Powell predicted last week that the issues will continue into the new year, prolonging inflation and raising prices for American consumers. 

In the UK, Prime Minister Boris Johnson has resorted to hiring the former CEO of supermarket chain Tesco to try to solve the country’s own supply chain problems. 

Scroll down for video 

At Sears in El Paso, Texas, clothing racks in part of the store were completely empty. 

In Home Depot stores in Westlake, California, and Naples, Florida, there were shortages of every day items and Target’s shelves in Virginia Beach and Atlanta were sparse. 

The CEOs of some of the nation’s largest manufacturers are facing tough calls with investors who want to know why shares are falling while consumer demand increases. 

One of the biggest problems is the backlog at the biggest ports  – L.A. and Long Beach, where dozens of ships are awaiting berth.  

The cost of shipping is reaching exorbitant heights as a result of the kinks in the normally-functioning system. Last month, the median average cost of shipping a metal container from China to the West coast soared 10-fold from $2,000 to a high of more than $20,000 and the cost of shipping from Europe to the North Coast of America also soared.  

As of Monday morning, 63 ships were anchored off LA and Long Beach Ports with wait times of up to four weeks. 

There are two cargo ships sitting off the coast of Long Island, waiting for port entry and there are 23 ships at anchor near Savannah, Georgia, with 80,000 shipping containers stacked at the city’s huge port – 50% more than usual.  

Walmart chartered a ship that normally transports grain to retrieve some of the goods from a backed-up ship at the L.A. port and move it to a nearby dock. 

Home Depot has chartered its own ship, filled with Halloween and Christmas decorations, to San Diego, and Target, Costco and Ikea have all also hired their own ships rather than use their ordinary couriers. 

On Friday, Walmart’s Executive Vice President of Supply Chain Operations, Joe Megetz, issued a press release on the ongoing challenges. 

He said the company had rerouted some inland shipments to avoid the clogged up railways, and that they were hiring thousands more truckers to make land deliveries. 

‘Knowing the challenges the overall supply chain system is facing, we’re taking additional steps to navigate the hurdles and minimize disruption, so we can deliver for our customers this holiday season. 

‘We’ve worked with suppliers to source holiday merchandise earlier than usual and are finding ways to move those products inside our supply chain network as quickly as possible. 

‘We have been laser-focused on inventory levels since the start of the pandemic and reported higher inventory in the second quarter this year than a year ago. While we’d like to see inventory levels continue to improve, we’re on the right track,’ he said.  

Freight trains are also backed up at yards in hubs like Chicago and there is a shortage of truckers able to drive goods across the country, with COVID-related delays to training meaning fewer newly-qualified truckers are taking to US roads. 

Trains at the nation’s largest railroad hubs in Chicago have been backed up for miles for weeks. 

Other manufacturers are at risk of soon not being able to produce goods because they are waiting for key components to make them.  

‘We’re praying. That’s what we’re doing,’  Steve Seeler, CEO of Seeler Industries, told The Washington Post last week. 

The company makes chemical solutions that are found in household cleaners out of its factory in Joliet, Illinois.

Seeler hasn’t been able to buy some of the ingredients necessary to make his best-sellers because of the shortages. Now, he says he buys what is available for fear of missing out entirely later down the line. 

Toy companies are telling parents to buy their kids’ Christmas gifts now to avoid disappointment.  

‘Get out and buy toys now. If you see toys you think the kids are going to want for Christmas, pick them up now and tuck them away to make sure you have them. 

‘Right now, stores have a pretty healthy supply. We just don’t know what’s going to happen when we get down the road closer to Christmas,’ said Ed Desmond, executive vice president of the Toy Association during an announcement last week. 

‘We’re certainly hoping that more containers come in both for the major retailers and to help some of these small stores. 

‘But one issue that we do fear is you may not see the same breadth of selection,’ he added. 

One toy company CEO said he had $8million worth of goods sitting in a Shenzhen warehouse.  

‘I got Tonka trucks in the south and Care Bears in the north. We’ll blow last year’s numbers away, but the problem is we don’t know if we’ll get the last four months of the year shipped.  

‘The supply chain is a disaster, and it’s only getting worse,’ Jay Foreman of Basic Plus! toys told Bloomberg. 

Some retailers, like Target and Walmart, are hiring expensive charter ships to try to get around the problem and fill stores again before the holiday shopping rush. 

‘Chartering vessels is just one example of investments we’ve made to move products as quickly as possible,’ Joe Metzger, executive vice president of supply-chain operations at Walmart told Reuters last week.   

At ports across the country, staff simply cannot work quickly enough to meet demand. 

‘We’re also storing thousands of empty containers at our yards because we don’t have the ability to return them. 

‘The marine terminals are either out of space or they’ve reached the allocation limit the steamship lines have given them for that particular type of container,’ Matt Schrap, CEO Harbor Trucking Association told KFOR on Monday. 

Among the dozens of ships waiting off the West Coast was one that arrived from Asia on September 5. 

‘Once cargo gets here to L.A., it’s like taking 10 lanes of freeway traffic and bringing it down to five lanes. 

‘We’re still moving more cargo than ever, but it’s not enough because of the buying power of the American consumer,’ ” said Gene Seroka, executive director of the Port of L.A.

The issues all point to continued inflation across America and the world. 

Miguel Patricio, CEO of Kraft Heinz, warned that consumers should expect higher prices as the issues wear on. 

‘Specifically in the UK, with the lack of truck drivers….In (the) US, logistic costs also increased substantially, and there’s a shortage of labor in certain areas of the economy,’ he said. 

Biden’s Build Back Better plan seeks to address the issue but some fear it won’t be done quickly enough. 

Last week, Powell said during a panel with  European Central Bank: ‘It is frustrating to acknowledge that getting people vaccinated and getting Delta under control, 18 months later, still remains the most important economic policy that we have. 

‘It is also frustrating to see the bottlenecks and problems not getting better — in fact, at the margin, apparently getting a little bit worse.

‘We see that continuing into next year, probably, and holding inflation up longer than we had thought.’