A year ago inbound cargo was given the cold shoulder as panic stricken retailers tried furiously to distance themselves from goods that looked unlikely to sell in the face of national lockdowns. This year, with inventories at subsistence levels, arriving goods are receiving a hero’s welcome. Lean buying coupled with over six months of logistics tie ups (lack of equipment, port congestion) has left most brands hungry for stock. That’s good news for suppliers, who last year faced a deluge of order cancellations. Still, the Suez snafu will result in costs for all parties. While vaccine programs are starting to send positive signals to retailers, merchandise shortages could be a stumbling block for both physical stores and e-commerce. <h3><b>More Costs, New Costs</b></h3> Insurance companies are likely to cover the costs of the cargo holders, and then try to claim back the money from the ship owners. However companies that are losing business because their goods are arriving late are unlikely to receive any compensation. In other times, retailers might penalize suppliers for late delivery or not accept the order. That’s unlikely to happen now due to low inventory levels at most retailers. A growing number of retailers are now looking to air freight in merchandise to hold them over until the cargo that has now been able to clear the Suez Canal reaches them. Ultimately, most brands are facing what could be several months of inventory imbalances. The biggest concern is seasonal products that are more time sensitive. Retailers are also facing the carrying costs of having goods in transit for weeks or even a month longer than planned. Manufacturers are likely to face pressure to extend what are already unthinkably long payment terms since goods are arriving 30 days or more later than planned. This incident is just one more signal of how fragile global supply chains are. The likelihood of another disaster occurring as carriers rely on mega ships to handle the growing levels of trade is viewed as “probable” instead of remotely “possible”.