Retailers Initiate Early Back-to-School Sales to Counter Amazon Prime Day, Escalating Freight Costs

19 Jul Retailers Initiate Early Back-to-School Sales to Counter Amazon Prime Day, Escalating Freight Costs

Retail giants Walmart, Target, and Shein launched early back-to-school sales to counter Amazon.com’s Prime Day event, advancing the peak ocean shipping season by two months and driving up already-high freight rates.

Retailers represent roughly half of U.S. container import volumes, while the ocean shipping industry handles about 80% of global trade. Goods have been moving earlier than usual since late last year, when Houthi rebel attacks near the Suez Canal forced cargo vessels to reroute around Africa. This disruption, as noted by A.P. Moller-Maersk, has affected global shipping networks beyond the Far East and Europe.

Nike executives reported importing athletic shoes and apparel in the March-May quarter, originally planned for June-August. Similarly, members of the Footwear Distributors and Retailers of America accelerated shipments to avoid new tariffs on computer chips and electric-vehicle batteries and potential disruptions from labor talks involving U.S. East Coast and Gulf of Mexico dockworkers.

The early demand surge has driven the off-contract cost of shipping a standard 40-foot container from Shanghai to New York to nearly $10,000, double the February rate, according to the Drewry World Container Index. This spike raises concerns about further price increases for inflation-strained U.S. consumers.

Year-over-year U.S. container imports grew 11.9% in May and 10.4% in June, according to Descartes Systems Group. Major retailers scheduled early back-to-school sales to counter Amazon’s Prime Day, which the e-commerce giant reported as its biggest ever. Amazon requires its sellers to position inventory at least a month in advance for sales events.

Currently, fall fashion, Halloween, and year-end holiday products are moving through the supply chain, with some already in stores. Home Depot has started selling its outdoor Halloween decor lineup, including the 12-foot robotic skeleton “Skelly.”

The Los Angeles and Long Beach port complex expects robust imports in July, with 63 ships en route, compared to the typical 52 to 55. Logistics executives aim to avoid supply-chain upheavals experienced during the Trump-era tariffs, the pandemic’s onset, and the Red Sea attacks.

The early start to peak ocean shipping could mean an early end to soaring freight rates. Some experts predict peak demand in July and August, with potential easing starting in September.