Beyond the Product: Breaking Down the Broken Supply Chain

The global pandemic of 2020 gave a brand new meaning to the word “pivot,” and just when we thought we were getting closer to permanently removing that word from our vocabularies all together, 2021 continues to remind us all that we still have a whole lot of pivoting left to do.

Just when we got used to seeing an abundance of toilet paper back on the shelves, we’re now seeing shortages on other basic household products, both necessity and luxury.  You might even be starting to see shortages on certain foods, both in the grocery store and at your favorite local restaurants, and if you’re part of the estimated 60% of Americans who tend to do the majority of their holiday shopping online, you’ve likely received a backorder notification (or five) letting you know the Christmas gift you just paid for won’t be delivered until after the new year.

UPS and FedEx have suspended guaranteed air-delivery services with no specified end-date.  Hold-times with customer service at every major online retailer are at an all-time high, and companies across all industries are struggling to hire new talent and expand their teams.  Prices are increasing, inventory is decreasing, and it seems that everything we thought we have been able to put back together in terms of how we do business in our daily lives is presenting a new set of obstacles we didn’t quite see coming.

So why, more than a year and a half into the pandemic, do these new issues keep popping up in so many corners of our lives?  Just where are these issues suddenly coming from?  Two words, friend:  Supply Chain.

Chances are you’re not sitting down to talk about the ins and outs of the global supply chain with your family at the dinner table, since the global supply chain isn’t something most of us really had to think about in our day-to-day lives.  Until recently.  Supply chain issues go much deeper than manufacturing a product and getting it from point A to point B, and any way you dice it, the challenges consumers are facing today all stem from the same breakdown in our global supply chain.  

We can’t really do much to alleviate the frustration felt when you realized you might not even be able to depend on Amazon Prime and that “guaranteed two-day delivery time” for the foreseeable future.  We can, however, help you dig a little deeper into the supply chain mystery for a better understanding of it all, and most importantly, what that means specifically for you when it comes to amplifying your image and branding your business in 2022.  

The invention of the shipping container completely changed the import and export game in 1956, and it has been revolutionizing global trade ever since.  The shipping container, a box that measured 20 feet long, eight feet high and almost 8 feet wide, has been the single biggest catalyst of globalization, as it plummeted shipping costs, making it cheaper (and easier) to buy and sell goods all around the world.  What has transpired in the years since the shipping container was born has helped make many goods more affordable and accessible, including branded apparel and promotional products, until manufacturers everywhere quickly learned the system wasn’t at all prepared for the shock of COVID-19.

Probably one of the most confusing factors in understanding the role the global supply chain plays on consumers’ daily lives is the fact that we now, over 65 years later, continue to see massive ports and infrastructures in place all over the world to accommodate the evolution of international trade, so the problem isn’t getting products shipped from one country to another.  The problem lies with the magnitude of people from different parties that are involved in each shipment and the number of manual processes involved in the flow of information and documentation between these parties.  If you’re hearing the words “supply chain issues” chances are it’s quickly followed with the words “labor shortages” 

What do labor shortages have to do with the breakdown of our supply chain?  Everything.

Product from China was still only taking about 14 days to cross the Pacific and come into the US, but COVID-forced labor shortages and lack of manpower created one heck of a traffic jam at the ports in Los Angeles and Long Beach (which together processes more than a third of US imports) when containers were forced to sit on the water for weeks at a time waiting to be unloaded.  The need for longshoremen and workers to unload the containers and reload them onto trucks to carry out the product delivery on land continues to skyrocket, and for every person needed to do the manual labor at the ports, there are ten more behind him or her needed to implement the proper safety protocols and paperwork that come with international trade.

As the need for labor continued to rise, so did the cost needed to acquire that labor.  Shipping costs suddenly went from approximately $3,500 per container to $12,500 per container, and because they were sitting on the water for substantially longer periods of time, China just as suddenly experienced a container shortage.  Goods were now stockpiling from every angle with limited means to import OR export, and just when we started to see a reduction in congestion off the coast of Shanghai, the Delta variant hit a port in Guangdong that is responsible for shipping one billion pounds a day, causing yet another unforeseen breakdown in the supply chain at its core.

Supply chain issues and labor shortages won’t last forever, and many experts are already saying we’re starting to see the end of the worst of it.  But if there’s one lesson we continue to learn from the pandemic and all of its aftermath, it’s that planning ahead is a trait we all might want to look at adopting as we head into the new year.  We’re working closely with our supplier partners to take care of your last-minute holiday needs, such as employee and client appreciation gifts, just as we always do, and we’re working closely with you to get ahead of the supply chain issues by planning for Q1 and Q2 events sooner rather than later.  We might not be able to get around the challenges the supply chain continues to bring us, but we can promise you it has nothing on us when it comes to amplifying your image louder and prouder than ever before.  

 

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