Supply chain expert warns 2023 ‘very bleak’ for US retailers


Supply chain logistics expert warns more importers and retailers signal an “imminent decline” in shipments and continue into the new year.

“I recently went to a major retailer just to get an idea of ​​the products there, and I see summer products when it should be fall and winter products for kids “said Alba Wheels Up International Founder and President Salvatore Stile.Mornings with MariaMonday. “So I really think that, especially 2023 is going to be very dismal.”

The bespoke shipping brokerage has reportedly seen a 20% decline in ocean freight orders in recent months, according to its founder, who claimed excess inventory and a possible resurgence of rail strikes nationwide are problems. factors fueling retailer concerns.

Last month, spending in retail stores fell as consumers continue to face the highest inflation in 40 years.

Retail sales, a measure of how much consumers spend on a number of everyday goods, including cars, food and gasoline, remained unchanged at 0% in September, the Department of Trade. Economists polled by Refinitiv expected sales to rise 0.2%.

COMPANIES DEMAND WH INTERVENTION AS RAIL STRIKE CONCERNS GROW

This is a marked decline from upwardly revised data in August, which showed retail sales actually rose 0.4%.

Alba Wheels Up International Founder and Chairman Salvatore Stile said the supply chain could have a “very dark” year in 2023 on “Mornings with Maria” on Monday, October 31, 2022. (Getty Images)

The September advance is not adjusted for inflation – which rose 0.4% last month – meaning consumers may be spending as much but getting less for their money.

Stile said the retail data showed a “false impression” of consumer spending.

“I think it was really an unhealthy expense,” Stile explained. “Credit card debt has gone up, consumers are taking longer to pay their debt, and I think a lot of the spending was due to retailers offering special sale items on excess inventory than they had previous months.”

The marine surveyor also discussed the impact of a nationwide strike by railway workers after a second union rejected a tentative deal with major freight companies brokered by the Biden administration.

“It was very vague…I don’t know how you could get 12 big unions with over 100,000 members to come to an agreement in a relatively short time,” Stile noted. “One railcar equals four to five truckloads. So, could you imagine having to strike with perishables that are probably uninsured?”

The conductor waits on the platform

Small businesses would be ‘crushed’ by an impending nationwide railroad strike after two unions rejected a Biden-brokered deal, Salvatore Stile said in ‘Mornings with Maria’. (Getty Images)

If strikes occur and disrupt rail shipments, Stile predicted that small and medium-sized businesses would be “crushed.”

“You would be stratospheric prices, especially low for food and perishables,” said the founder of Alba Wheels Up. “I think that’s a real major problem.”

Several union members says FOX Business they are frustrated that their union representatives approved the recommendations of the presidential council, arguing that the agreement did not do enough to improve working conditions.

The 12 unions involved in the negotiations must agree to ratify their new contracts or else a strike could occur and devastate supply chains and the economy as a whole. Currently, the earliest a strike could occur is mid-November. If a work stoppage is triggered, Congress should intervene.

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Stile warns longshoremen working at West Coast Seaports will also closely monitor the potential fallout from the agreement with the railway union.

“The West Coast longshoremen are watching very carefully what happens with the railroad strike as they are still in negotiations on the West Coast,” he said. “So can you imagine now if the rails are doing a lot and the stevedores aren’t doing as good a deal, what are they going to do?”

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Megan Henney and Breck Dumas of FOX Business contributed to this report.

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