The US Federal Trade Commission (FTC) is seeking information from major US companies on ways they are dealing with supply chain issues as part of a study into the cause and possible solutions.
The requested documents are part of a wide-ranging study on how significant the issues are and “how these disruptions are causing serious and ongoing hardships for consumers and harming competition in the US economy,” according to a FTC press release.
The request is not part of any enforcement action, but is meant to help the FTC understand the reasons for widespread supply-chain problems and their effect on economic growth. The FTC’s mission is to protect consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education without unduly burdening legitimate business activity.
The FTC requested information from some of the US’s largest companies, including Amazon, Procter & Gamble, Walmart, Kroger, C&S Wholesale Grocers, Associated Wholesalers Grocers, McLane, Tyson Foods and Kraft Heinz. The companies have 45 days to respond.
The order requires the companies to handover the following information:
- The primary factors disrupting the company’s ability to obtain, transport and distribute its products,
- The impact these disruptions are having in terms of delayed and cancelled orders, increased costs, and prices,
- The products, suppliers, and inputs most affected,
- The steps the company is taking to alleviate disruptions and how it allocates products among its stores when they are in short supply,
- Internal documents regarding the supply chain disruptions, including strategies related to supply chains, pricing, marketing, promotions, costs, profit margins, sales volumes, selection of suppliers and brands, and market shares.
The FTC also wants to know what companies are doing to fix the problems and how they allocate products among stores when products are scarce.
Spokespersons for the companies contacted by Capital.com said the request has not been received or had no comment.
Across the nation, businesses have struggled this year with delays of importing and transporting products around the country, as coronavirus pandemic outbreaks have stalled ports, shuttered foreign manufacturing sites and created worker shortages. Cargo ships are waiting weeks to unload at the US’s two busiest ports, Los Angeles and Long Beach.
While major chain retailers have been able to avoid some of the headaches by chartering their own cargo ships, smaller chains have not and are scrambling to keep stock for the Christmas season, retailers make or break period.
President Biden reacts
On Monday US President Joe Biden met with executives from several retailers and grocers, including the leaders of Walmart, Best Buy and Food Lion to learn how those companies are addressing the issue.
During the meeting, he spoke about increased Black Friday sales figures and the uptick in consumer spending.
“We’re looking toward the holiday season. We feel a lot more like the ones we had in the past,” he said.
Walmart CEO Doug McMillon said in the meeting that despite supply-chain concerns, inventory levels at the nation’s largest retailer were up by 10% ahead of the holiday season. “We have more inventory than we did a year ago and have the inventory that we need to be able to support the business, and we are seeing progress—the port and transit delays are improving,” he said.
Earlier this month, Best Buy CEO Corie Barry said the specialty retailer was confident it could serve customers throughout the holiday season, having entered the fourth quarter with 15% more inventory year-over-year.
Read more: Panel: Supply chains need modernisation
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