Purchase Limits Begin Amid Supply Chain Issues

Costco limits purchases on certain goods in anticipation of COVID-19 flare-ups, increased supply chain backups.

October 05, 2021

A Person Holding Toilet Paper

CHICAGO—Purchase limits are happening again in anticipation of low inventory levels, but the reasons for the limits are different in 2021 than in 2020, reports Mental Floss.

There’s plenty of product being created at manufacturers, but supply chain backups, including a shortage of shipping containers, port delays and trucking and driver shortages, are causing low inventory levels.

NPR reports that Costco has placed limits on toilet paper, packs of bottled water and cleaning supplies in anticipation of potential COVID-19 surges and difficulties receiving the products.

Costco Chief Financial Officer Richard Galanti told NPR that the wholesale chain has chartered three ocean vessels for the next year to transport several thousand containers between the U.S., Asia and Canada. Each ship will be able to carry 800 to 1,000 containers at a time.

Costco isn’t alone in this. Many retailers are taking shipping into their own hands to offset delays. Walmart and Target are chartering their own ships, and so is Home Depot. Coca-Cola is chartering three ships to transport manufacturing goods because it could not get the shipping containers and cargo space needed for transportation, reports Business Insider.

"For these we are heading to some non-congested ports, so we are hoping for a smooth discharge. Good coordination is vital on both the planning and the operations side for loading and discharge," Alan Smith, the procurement director of global logistics at Coca-Cola, wrote in a post on LinkedIn.

Supply chain snarls will largely affect inventory surrounding the holiday season, as many stores are attempting to prepare for an increase in spending during the holidays.

The supply chain issues stem from COVID-19 outbreaks in key Asian supplier countries, the U.S. truck driver shortage, domestic warehouse worker shortages and wildfires in Bangladesh. Factories are also trying to recover from last year’s holiday shopping season.

As NACS Magazine shares in the October 2021 issue, the shortage of truck drivers in the U.S. has carriers trying to tap into underleveraged talent pools.