A popular Amazon warehouse is closed! The delivery of goods may be delayed

Recently, some freight forwarders and logistics companies have reported that Amazon's popular warehouses are seriously overcrowded, and sellers may experience delays in putting their goods on the shelves and delivering them. At the same time, the problem of container backlogs at ports in the western United States is still not optimistic, and sellers need to make multiple preparations for shipments.

Amazon LAX9 warehouse temporarily closed due to warehouse explosion

In the past two days, some sellers reported that they received a notice from the freight forwarder that Amazon's LAX9 warehouse will be temporarily closed. According to the specific content of the notice, the LAX9 warehouse has been frequently cancelled and changed due to serious warehouse overflow. The warehouse will be closed for two days from July 28 to 29, and the appointments originally scheduled for the 28th to 31st of this month have been changed. For the goods that have not been delivered yet, the freight forwarder said that they need to wait for Amazon's notification before making specific updates, and will notify you again when the time comes.

A freight forwarder said that due to the temporary warehouse closure, some sellers’ goods may not be put on the shelves in time, and the delivery time will be delayed. Although this is not the first time that Amazon’s warehouse has been blown up, it will also cause considerable losses to sellers. Some sellers said that if the goods cannot be put on the shelves and delivered in time, buyers may return them, which will increase losses. In addition, due to the warehouse explosion problem, some sellers can only make new appointments, and the goods cannot be delivered, and additional fees may be incurred. One seller said: " After several warehouse explosions, the speed of goods being put on the shelves has been delayed again and again, and I am anxious waiting!"

Many sellers are often troubled by warehouse explosions, but they have become accustomed to such incidents and say that it is useless to be overly anxious. Some sellers also believe that in order to avoid such risks, they should prepare more countermeasures, such as choosing overseas warehouses or changing to other warehouses, otherwise such problems will occur every once in a while and they can’t afford to worry about it.

It is understood that the warehouse LAX9 that exploded this time is one of Amazon's popular warehouses, located in Fontana, San Bernardino County, California, USA, close to another popular warehouse LGB8. The warehouse is also one of Amazon's large warehouses for collecting and distributing goods. In fact, the above two warehouses have experienced multiple explosions from May to July this year.

In addition, warehouses such as ONT8, SMF3, and FTW1 also had frequent problems and were frequently overwhelmed, especially during peak seasons. Although Amazon had previously planned to expand its warehouses to solve problems in warehousing and logistics, its expansion plan was temporarily slowed down due to various reasons.

When Amazon released its second quarter financial report yesterday, the company's executives also answered questions from investors about warehousing. The relevant person in charge said that distribution and transportation have always been its investment focus. Amazon invests a large part of its funds every year. This year, it is expected that about 40% of the funds will be used to increase storage capacity and improve transportation efficiency, and its impact will be apparent after 2023.

This means that if Amazon's expansion plan is implemented, it may be able to solve some of the problems encountered by platform sellers in warehousing and logistics, and alleviate the crowding of popular warehouses during peak seasons.

Regarding the warehouse explosion problem, a logistics company said: " In fact, warehouse explosion problems are mostly caused by a surge in cargo volume. But in fact, this year's shipments have not increased significantly. Instead, they seem to be very calm or even decreased, and it is common to receive goods at low prices. If it is not a problem of cargo volume, it may be a shortage of manpower, or the shipper chooses to import goods from the eastern US ports to avoid congestion at the western US ports. These will, to a certain extent, lead to a sudden increase in cargo volume or poor transportation in some unpopular warehouses, not to mention the popular warehouses."

When it comes to the US port issue, it is worth noting that although the waiting time for ships at the US east and west ports has been relatively shortened, the amount of cargo piled up is not optimistic, and there are still potential risks in logistics and transportation. While sellers are concerned about whether the goods have been put into the warehouse, they should also pay attention to the transportation of the goods.

U.S. ports have been hit repeatedly, and congestion issues remain unsolved

Last year, the congestion problem at US ports had a huge impact on the global supply chain. Although the congestion problem has been temporarily alleviated this year, strikes and the epidemic have once again hit many ports in the country, and the side effects have extended outward. With too much cargo in the western US ports, many ships have chosen to take detours, causing a surge in cargo volume at the eastern US ports. Coupled with the multiple strikes that broke out at US ports this year, the country's supply chain has become increasingly fragile.

In the middle and late part of this month, large-scale strikes and protests took place at the three major ports in the United States, namely the Port of Los Angeles, the Port of Long Beach, and the Port of Oakland. Before the protests began, some gates had issued temporary closure notices, causing delays in cargo transportation. It is reported that the cargo volume of the above three ports accounts for half of the total cargo volume in the United States.

It is reported that the main reason for the strike is that truck drivers in the country oppose the AB5 bill. The AB5 bill is a union bill in California, which came into effect on January 1, 2020. The bill requires hired independent contractors to reclassify these truck drivers as employees, thereby supervising the hired temporary workers. However, the bill has been strongly opposed, and some truck companies have even chosen to move their business out of California to express their dissatisfaction, which has once again impacted the already fragile supply chain in the area.

In addition, container backlogs at US ports remain a major problem. According to previous foreign media reports, the number of container backlogs at US ports has been reduced by nearly half, but the rate of reduction has slowed down. In mid-July this year, the number of imported containers at the terminal yards in Southern California was close to its peak , and the backlog of containers at the country's Changnan Port even exceeded last year's historical high , causing the container backlog problem to attract attention again.

In fact, the country has introduced a " container detention fee" last year to speed up the circulation of containers, but the policy has been repeatedly delayed, and the Port of Long Beach and the Port of Los Angeles have postponed the review of this fee until now. From the latest situation, the executive directors of the two ports said that they will re-evaluate the implementation of the fee after monitoring the data next week, and the charging plan may be extended to October 26 this year.

According to the temporary policy requirements, ocean carriers can charge a fee for each imported container that stays at the terminal for 9 days or more. The fee for each container and the daily increase are both US$100. The fees collected will be invested in the optimization of the port.

Judging from the current situation, it is still unknown when the fee will be fully implemented and when the port congestion problem will be solved. However, it must be acknowledged that in terms of shipping, whether it is freight rates, container fees, waiting time for ships, and smooth transportation, it has indeed eased compared with last year. However, carriers still need to make plans in advance before shipping to prepare for emergencies and control the shipping, transportation, warehousing and other links.

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