The shelves are about to go bare.
Is it that some 30% of Walmart’s products come from China?
Just this morn I asked some worker bees at Walmart if there was any “inside story” about the shelves being empty in 2 or 3 weeks. They all said either they hadn’t heard anything or acted like they didn’t know what I was talking about.
This could mean:
It’s all hyped-up hand-wringing because people like that aren’t good actors and you can’t rely on all of them to say “no” just because they’ve been told to say that. Especially if you have several specimens.
Or, there really don’t expect empty shelves so the situation can’t be that bad. Or management knows something and didn’t tell, or lied to, the workers.
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ROTFLMFAO!
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Recall, there wasn’t any TP “shortage” in the spring of 2020, until the media started screaming about it.
Steve
My last TEMU order of about $60 has landed at LAX air freight to clear customs. I’m pretty sure I’ll beat the cut-off date.
Saw on the news that a $10,000 container of cheap stuff from China requires a S14,000 tariff payment at the dock. Yet in many cases it will still beat Jeff Bezos pricing.
Minimize the Skim.
intercst
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Is it really only 30%? I am surprised that it is not higher.
I heard an ad on a podcast for 100% US produced clothing. The company is American Giant. $68 T-shirts
NPR’s Market Place ha a pice on the demise of affordable clothes.
I am afraid that the future will take us back to FDR’s 1937 inaugural address.
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Port Los Angeles expects 36% less incoming shipments this year.
Looks like the fun is over.
Chinese discount giants like Temu and Shein are already raising prices. Shein hiked its U.S. prices by an average of 51% in just a week, with some products doubling. These aren’t isolated blipsthis is the first wave of a cost shock that could bleed into everything from electronics to autos. Tesla (NASDAQ:TSLA), Apple (NASDAQ:AAPL), and any brand with China-linked supply chains are now staring down margin compression and potential demand headwinds.
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We will have deflation. It is not what the price is. It is what the demand is. We will have mass layoffs.
I use dowels in woodworking joinery, can use a lot depending on how strong I want to make the joint. The last 2 dowel orders I made on Amazon have been cancelled. Amazon refunds the credit charge of course, so not out anything. The local Big Box stores ( HD, Lowes, Menards ) sell little packets of dowels, but crazy expensive compared to what I was paying for the China imports on Amazon.
I’ll try Amazon again, they didn’t specifically say that it was tariff related, just that there were problems in transit. But it is tariff related, of course.
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I bought a braun razor. Part of it made in China.
Walmart will have it again price won’t matter. Yet odds are it disappears for a few weeks.
Port of Los Angeles activity for May, start of June.
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Someone just acknowledged this post from April. As Elvis would say: "Thank you. Uh, thank you verra much" But it did bring to my attention the fact: There have been no empty shelves. Anywhere I’ve been to. And I haven’t heard any “neighbor chatter” about what people can or can’t obtain. Business a usual in The Land of Plenty. So, just what do those longshoreman in Los Angels do? Where is it coming from?
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I’m sure the media will find something to scream about. Remember, a few months ago, the media was trying to stoke another toilet paper panic.
Steve
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Maybe it’s all in warehouses? Remember that excess imports were sufficient to reduce first quarter GDP by 2-3 percentage points.
DB2
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I thought that’s what the 2-3 weeks till the empty shelves thing was all about. The warehouses would be depleted or close to it. AND… it’s been way more than 2-3 week now so even if their estimate was off, (and I can accept that. It wasn’t an exact number.) we seem to be nowhere near empty shelves and even the talk has moved on to other things. But there’s supposedly all those ships that aren’t there or weren’t offloaded by all those longshoreman who aren’t working.
Where’s all this “Alternate stuff” coming from?
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Everything I have read says there is a 4-6 month supply of stuff in warehouses, which became packed at the first announcement of tariffs. Some of that inventory is being worked off, while some is being replenished during the “90 day pause.”
Recall that it costs companies money to keep so much stuff off market, but they have to balance that by accepting the risk that they won’t have any product (at reasonable price) once the in-country inventory is used up.
Meanwhile, I have read numerous stories about the drop in shipments to the Ports of LA and San Francisco, where most stuff from China comes in. Those are supposedly down by half, which mean s there is some shipping still being done, it’s just not on the scale that they were used to.
Now is the time when a lot of Christmas inventory would start arriving (if that gives you any hint of when shortages might show up in other areas). Temu shipments to the US are down by half (I have read), and there’s a lot of other logistics stuff that’s being upended - you just don’t see it yet because a) it takes so long to actually mean something and b) they’re pulling every string they can to hide it (not in a nefarious way.) It’s like when the government says “We run out of money on June 5” but there are still things they can do to mitigate the deadline even if they aren’t the most advisable.
Working for Westinghouse I recall there were quarters where we were told to “pull the plugs”, that is, do things to make the results look temporarily better, like slowing bill payment to 90 days from 30, postponing advertising expenses, recognizing revenue before it was actually received (although services had been rendered) and so on.
All of this isn’t a fiction, it’s just not showing up in highly visible ways yet. (On the Homeowners board one guy says he’s had two orders from Amazon cancelled without explanation: cheap stuff from China, still on the site, ordered, and inexplicably cancelled. Not a big deal, but a clear “tell” in my view.)
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Thanks. An excellent exegesis. Would have been nice if the mediums in April-May had said some of it instead of just going with the “empty shelves” and no ships to unload, thing.
That doesn’t keep people glued to their TV/device. It’s all about keeping people keyed up, all the time, about everything. Wonder why people seem so on edge these days? Ever wonder why “road rage” incidents that used to be resolved with a horn honk or shaken fist, now become gun fights? And, don’t forget, every day “SEVERE WEATHER THREAT!!!”
Steve
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