• Amazon sellers are facing issues in keeping up with consumer demand
  • One of the world's busiest ports is operating in limited capacity due to COVID-19
  • A retail trade group has urged President Biden to take action against port challenges

Amazon’s Prime Day sale may face issues this year as sellers struggle to stock up its stores and distribution centers amid delays in supply delivery and problems with port capacity due to the COVID-19 pandemic.

The company is set to kick off its two-day sale on Monday. The 2021 mega sale is available for Prime members, who are touted to get access to “more than 2 million deals,” Jamil Ghani, vice president of Prime, said during a press event on June 1.

However, sellers may face issues in keeping up with consumer demand as the coronavirus pandemic forced some factories to shut down temporarily. Inventories have been further disrupted by shortages in shipping containers and air freight capacity globally, CNBC noted.

Amazon sellers who import their products from China also face shipping issues after officials in Guangdong introduced limits on vessel entry to limit the spread of the coronavirus. The Yantian International Container Terminal in Shenzen, considered to be one of the world’s busiest ports, now has limited capacity.

The issues with the supply chain prompted the National Retail Federation (NRF), the world’s largest retail trade association, to write a letter to President Joe Biden urging for action on port challenges as more than two-thirds of its 16,000 members faced increased shipping costs.

“Our nation’s supply chains are stressed because of the COVID-19 global pandemic, and they continue to struggle through our economic recovery. We would like an opportunity to discuss the impact these issues are having on the nation’s retailers, our workers and our customers, as well as potential solutions to address current and future disruptions,” the letter read.

“The congestion issues have not only added days and weeks to our supply chains but have led to inventory shortages impacting our ability to serve our customers. In addition, these delays have added significant transportation and warehousing costs for retailers. In many instances retailers will absorb these costs and not pass them along to consumers,” they continued.

Prime Day 2021 is expected to feature deals from small- and medium-sized businesses. More than 2 million consumers also used Pre-Prime Day promotions, an Amazon spokesperson said.

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Despite Amazon's colossal footprint and market capitalisation of more than $1 trillion, its profit margin last year amounted to just 6.3 percent. AFP / Angela Weiss