Depending on your state of mind and when you read the headline for this column, you may expect it to focus on any number of domestic or global issues. Perhaps you’re expecting to read about the current supply chain backlog. As I write this, there is a containers ship, longer than the Empire State Building is tall, stuck sideways in the Suez Canal, completely snarling the flow of traffic through that crucial water way. The first time I read that I thought it was a spoof. Unfortunately not.
That news comes close on the heels of word that a major U.S. foam supplier is the recent victim of a cyber-security attack that shut its business down altogether, albeit briefly, and will pile more delays and allocations on a segment that’s already had more than its fair share this year.
Or perhaps it is price increases and surcharges that are atop your list of existing and anticipated pain points. Maybe some orders you placed to meet sales you’ve already made have just arrived and the price is higher than you were quoted when the order was placed. You complained to your supplier and were told — politely I’m sure — that if you don’t want them it’s not a problem, but some other retailer will be glad to pay that price to have them sent their way.
Or maybe your buyers are climbing the ledge of the nearest tall building because they’re having to account for so many different surcharges — 2% on this, 6% on that, 5.5% on the other thing — and simply can’t keep up.
Possibly you’ve just received a letter from a supplier that is no longer able to service your portion of the country or to ship retailers of your size. And just as possibly it’s not the first such letter you’ve received, and now not only are you having trouble getting goods from the suppliers still willing to sell you, but you’re having to figure out who might be able to fill the gaps created by the companies that just dropped you.
Then again, the coronavirus continues to hang around, and new variants are emerging, making it a race to see if enough vaccinations can take place before another surge is set off. So depending on where you stand on the whole vaccination-mask-pandemic issue, it’s possible that was top of mind when you read the headline.
So which is it? Is it backlogs, price increases, surcharges, supplier discontinuations, or is it the pandemic?
Yes.
There are many challenges facing the industry right now. None of them are quick fixes. None of them will disappear overnight. And while things will get better for some, they will get worse for others, at least in the short term.
Be assured however that the steps are being taken, the measures put in place to return the industry to some level of new “normal,” whatever that might look like. Every day we’re in discussions with companies bringing on more capacity. The supply chain is kinked but far from broken. Pricing will achieve equilibrium, perhaps albeit at higher levels, but it will stabilize. As for the pandemic, there is disagreement about many things, but its eventual elimination is not one of them.
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March 29, 2021 at 05:37PM
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