Want to Know Why You Can be Waiting 16 Weeks or MORE For That Chair or Sofa???
Six months from our original post (see below) on lead time challenges in the Covid-Era, we’re still dealing with the Saga of the Supply Chain and getting a lot of questions from clients about, “When will this snowball quit rolling?” so here is an update from Connie where she addresses concerns and shares some good news:
“I realize it seems like it will never end – Ugh!
The lead times continue to increase rather than improve with so many disruptions since the pandemic began: factories shutting down along with the shipping and delivery, demand stacking up, and everyone getting further and further behind. Most of us have been understanding and tolerant of the situation, but I find many are getting less patient and more frustrated. So, let’s all take a deep breath and I’ll give you an update on how we can continue to create those special places. You are probably not one to settle for room by number or ordinary big box selection.
Recapping The Story
The pandemic made us take a closer look at our spaces and we wanted to create more of a sanctuary and place to work, study, and perhaps workout from home. That added more demand for products that were already backing up in shipping and trucking industries that had halted due to limited workers and the ups and downs of Covid. And with demand came price increases. According to those in the business, shipping containers that might have been $4000, are now costing upwards of $20,000. Another report just recently from a company that has had many orders waiting, said their numbers are $3000 to $30,000 for containers. Port backlogs are causing ships to drift outside ports for days or weeks and this racks up late charges. You can see from this that the prices on the merchandise then had to go up – and they have. We get notices almost daily updating the surcharges or price increases, sometimes 10 – 11%. Depending on the value of the product, the cost of shipping merchandise can be more than the goods themselves.
There is some recent good news! Our country’s largest port complex, Los Angeles and Long Beach are going 24/7 to improve freight movement and hopefully reduce delays. Both will expand the hours that trucks can pick up and return containers. There will be night gates available, and all of this should help meet the unprecedented growth in cargo volume. To understand how important this is, 70% of tonnage of all US international trade moves by water through our nation’s ports. This area moves approximately 40% of all container cargo entering the US each year and about 30% of all container exports.
Now the trucking community needs to come up with corrective measures. We know they don’t have enough drivers. Once the items have reached the port, they await a shortage of trucks and finally are trucked to distribution centers around the country, to sit there to wait for a scarce driver to pick them up and deliver. We are seeing not only long lead times for deliveries, but a lot more damage to items with this situation. Then the cycle starts over again trying to get replacement items. So, when we feel helpless or outraged, let’s think of the companies trying to get the merchandise to us.
There are efforts currently by the Federal Maritime Commission and Congress to create legislation which would regulate some of this, and lobbyists who oppose it and want to keep more of a supply and demand solution. I won’t go into this any further, but you can form your own opinion by speaking to your legislator or trade association about their position to learn more and give your feedback.
At Design House and Fabric House, we are constantly monitoring the situation, tracking the lead times and surcharges, and anyone who has in stock merchandise. We are sourcing for as many as we can to help find those needed, and special items for their home or project. Our long relationship with vendors helps us to be able to find the solutions. Then we handle the delays and damages! To overcome this period, we have to adapt, improvise, and become more nimble. I bet in the long run, we will be even better and more efficient!”
[ORIGINAL POST 3/16/2021]
At Design House, we are constantly updating what products manufacturers have available, in stock, quick ship, or even just a few weeks out; and we are happy to share and help you find that perfect piece. But a question we hear everywhere is, “Why are lead times so terrible right now and when it will get better?”
Let’s dig deeper into the scarcity of raw materials to better understand the “why” and when we might get closer to pre-pandemic production. In addition to the pandemic, weather plays a big part. The shortage of foam is one example, and is the reason for so much upholstery having such long lead times. Without getting too technical, foam is made up of two raw materials and they are delivered by either railcars or tank trucks. These foam plants have storage tanks, but depend upon a steady and timely supply of these railcars and trucks in order to produce the foam. Most of the large polyol producers are on the gulf coast, close to the propylene oxide producers.
So, when the winter storm hit the gulf coast, there was an abrupt and unexpected shutdown. Power, steam, nitrogen, and hydrogen supplies were lost. They have compared this to a Cat 5 hurricane hitting all of Texas in the middle of the night for them. And, of course, restarting those plants requires utilities and power, which were out. Damage can’t be assessed until steam and nitrogen services are restored, and some are still down as of this date. Then the lines need to be inspected and damage repaired. The plants will start at reduced rates and may take months to get back up to full rates, at which time the entire polyol inventory pipeline needs to be refilled. There is still uncertainty about when the foam industry can restart safely, and it changes as the companies assess the damage and do repairs.