A study by Morgan Stanley consultants indicates that there is way too much inventory in retail outlets. They believe it’s an overshoot of almost 20%. That means that inventory needs to be liquidated by these firms, and also that they will slow down reordering.
The implication for transportation is less demand for it. That’s consistent with the downturns on prices we see for goods movement in both ocean shipping and domestic trucking.
Too much inventory can be good for retailers like TJMaxx and Ross that can help liquidate inventory of more upscale retailers. They will have good supplies of products to move at a discount.
It is interesting to see how directly supply chain and logistics activity correlates with inventory levels. While it’s not always the case, right now the connection is direct.
Rachel Premack Tuesday, October 11, 2022
Inventory is a ‘high risk’ for retailers: Morgan Stanley – FreightWaves
Supply Chain and Logistics 