Amazon warehouse suspends receiving goods, and US terminal delays expand

Freight to the United States has dropped significantly, and sellers' delivery costs have to be reduced. However, the final delivery is still not strong. A large number of Amazon warehouse workers went on strike, and some warehouses in Europe and the United States were affected. Some popular warehouses were closed and stopped receiving goods due to high-load operations. The current logistics situation at the end of the United States puts Prime Day's delivery under great pressure.

Amazon warehouse suspends delivery

Just as sellers are eagerly preparing for the Prime Day promotion, Amazon warehouse overflows continue.

According to logistics insiders, warehouses such as GYR3, SCK4, SCK3, and SMF3 are experiencing delays to varying degrees. Bookings for ONT8, LGB8, LAX9, and SCK4 are unstable and are expected to be delayed by up to 10 days.

Due to high-load operation and warehouse overflow, GYR3 was temporarily closed recently and stopped accepting goods. The signing time will be delayed by about a week. GYR3 is located in the Amazon warehouse east of Phoenix. It is a relatively popular warehouse in the western United States. It can deliver FBA sea freight and sea trucks, which is very convenient. Many sellers' goods will be assigned to this warehouse.

In May, a seller reported that the goods sent to the GYR3 warehouse in the United States were not registered for receipt 22 days after arrival at the warehouse. A case was opened to contact customer service. The customer service said that the warehouse had received the goods, but the shipment information page did not show it. The warehouse was full and the shipment was in queue.

At that time, a freight forwarder informed the seller that GYR3 was seriously overwhelmed. Other warehouses such as LAX9, LGB8, LAS1, and SBD1 were also popular warehouses and were receiving goods normally. However, GYR3 had been delivered for 7 days and there was no movement on the goods in the backend, and it was not known when they would start signing for them.

The situation at GYR3 did not improve from May to June, and the goods previously delivered to the warehouse had no immediate prospect of being put on the shelves.

Not only GYR3, but now because of the Amazon workers' strike, many Amazon warehouses are being or have been affected. The warehouses are overwhelmed and lack of manpower. The internal situation can be imagined. A logistics person said that the scope of delays at the end of the United States is currently expanding and cannot be restored in the short term. Many sellers are helpless: "With this logistics situation, even if PD orders are bursting, it cannot be delivered normally!"

In addition to the United States, Amazon's delivery situation in Europe and the United Kingdom is not optimistic. Many warehouses are seriously overwhelmed and unloading is delayed. Currently, many PDD warehouses have delayed and stopped sending packages from all FBA warehouses. In particular, it is difficult to make an appointment for delivery at Amazon's 44145, 06126, 29015, and 38350 warehouses.

It is reported that tens of thousands of Amazon packages are stockpiled in the UK PDD warehouse and cannot be delivered, and the speed of product listing is very slow.

Amazon workers in Europe are also on strike. On June 26, German public sector union ver.di said that workers at an Amazon warehouse in the eastern German city of Leipzig began a 48-hour strike on Monday to demand higher wages. The workers hope to reach a collective labor agreement that includes a 12-month hourly wage increase of 2.5 euros and a 250 euro wage increase for apprentices.

There are already a lot of delays, and with warehouse workers in Europe and the United States striking again, Amazon's logistics and delivery timeliness will inevitably be affected again.

Prime Day is coming, and as the number of orders increases during the promotion, Amazon's delivery problems will become even worse. In addition, with the upcoming peak season in the second half of the year, if the delivery time cannot be alleviated, this year's peak season will continue to be in a state of overload and delays.

Amazon is also looking for ways to deal with the delays. The e-commerce giant is currently contacting thousands of florists, wine cellars, and coffee shops to speed up package delivery.

The expansion is the latest attempt by Amazon to turn to external partners to shorten delivery times and reduce costs in "last mile" transportation. An Amazon spokesperson confirmed that the project will be carried out in at least 20 densely populated cities such as New York, Boston, Los Angeles and Seattle.

According to Axios, participating small businesses will receive packages from Amazon in the morning and then expect to deliver 20-50 packages per day, seven days a week, for a total revenue of $27,000 per year. Amazon plans to work with 2,500 small business drivers to deliver packages by the end of this year.

Amazon recently overhauled its shipping system in the United States, moving from a single-country model to eight self-sufficient regions. This focus on smaller geographic areas means that customers are more likely to receive packages from warehouses closer to them. The shorter shipping distances reduce costs for Amazon, but for now it seems to increase the burden on sellers.

Shipping rates to the US drop sharply

While Amazon's deliveries continue to be delayed, Haiyuan's prices have fallen, which will save sellers some shipping costs.

The latest data from Freightos Baltic Exchange (FBX) shows that freight rates from Asia to the West Coast of the United States fell sharply by 15% to US$1,209 per 40 feet last week!

At present, the spot container freight rates on major container routes continue to fall. The latest data from the Shanghai Shipping Exchange shows that on North American routes: the freight rate (sea freight and sea freight surcharge) in the US West Coast base port market is US$1,173/FEU, down 2.8% ; the freight rate (sea freight and sea freight surcharge) in the US East Coast base port market is US$2,061/FEU, down 2% .

In early June, there was a brief rise in shipping prices to the United States. Freight rates from the Far East to the West Coast of the United States on the North American route increased by nearly 20%, and freight rates from the Far East to the East Coast of the United States increased by more than 10%.

According to Daweige, a logistics expert, the current shipping prices are on a roller coaster . Prices rose in late May and early June, and have been falling since mid-June. Prices may rise again in early July because the third quarter peak season of the logistics industry is coming soon, and the specific freight rates are closely related to market demand.

The latest news is that imports and cargo volumes at U.S. West Coast ports have increased for the third consecutive month. Cargo volumes at the two largest ports on the West Coast are growing steadily, with a sharp increase in cargo volumes in May.

The Port of Los Angeles, the busiest U.S. port, handled 779,149 twenty-foot equivalent containers (TEUs) in May, its third straight month of growth. The Port of Long Beach, the other largest port, handled 758,225 TEUs in May, up 15.6% from April.

However, despite the increase, it is still down compared to last year. The May figures for the Port of Los Angeles were down 19% from May last year, even though they have increased by 60% since February. The May figures for the Port of Long Beach were down about 14.9% from last year.

According to data from Descartes, a US research company, the volume of seaborne container shipments from Asia to the US in May was 1,474,872 (calculated as 20-foot containers), a 20% decrease from the same period last year, and the decline was roughly the same as the 19% drop in April. Excess inventory in the US retail industry has not yet been eliminated, and import demand for consumer goods such as furniture, toys and sporting goods continues to be weak.

MSI’s June Horizon Containership Report predicts a “challenging” second half for the shipping industry unless demand “recovers sufficiently to offset the upcoming massive capacity injection”. The forecast also says freight rates will “rise only modestly” by the end of the third quarter.

The current shipping prices are indeed like a roller coaster, but the decline and increase are not large. According to the current situation, logistics experts believe that prices will not rise sharply in the third quarter, but delivery at the end of Europe and the United States will continue to be delayed.

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