Dozens of ships docked outside California ports waiting to get in, no room at UK ports, unloading taking up to three times longer than usual, and skyrocketing container prices.
What is going on with global supply chains and what solutions are available?
At MaCher we make branded products for our clients that require functioning global supply chains. Until a couple of months ago, things worked exceedingly well. Our on-time delivery record across 30 years of business was always above 96%, in some years, 100% on time.
We plan, design and manage projects in California and work with factories at home and around the world where we have built strong long-standing relationships to manufacture products. The finished goods are made and shipped to our clients’ offices and warehouses before they go on to reach happy customers.
Over the last few months however we have been faced with port and rail delays, a shortage of containers at origin ports, overbooked vessels, low numbers of truck drivers and soaring shipping prices. Like many companies selling goods to consumers, our team has been dealt some sleepless nights.
Why are these delays happening?
For months while we were locked down in pandemic-enforced bubbles, the world slowed and companies halted production. We were doing less so needed fewer things in our lives. People lost their jobs or moved elsewhere to find more work. The number of workers at the ports of Los Angeles and Long Beach is estimated to be down by about 30% compared to pre-Covid levels, for example. Now as the world opens up again, the process of switching that tap back on to full is not as simple as switching it off. It is going to take some time for people to be rehired, skills to be learned and backlogs to be processed.
What are we doing about it?
Our focus is necessarily both short and long.
For our clients who have scheduled autumn and winter campaigns, we communicate daily of the movement of their goods so they can adapt their plans if needed. Being one of the few companies certified by CTPAT gives MaCher priority in clearing customs.
Our in-house Head of Logistics uses her decades of experience moving freight around the world to navigate the quickest routes. She can avoid the most congested ports and identify alternative methods for shipments with urgent delivery requirement. We are planning longer production lead-times for new and upcoming projects where timelines allow. While our 100% on-time delivery record has slipped a little over the past few weeks, we are holding up well.
Our pricing has always been “all inclusive” – one unit price delivered the product to the door. With container prices rising and falling at unpredictable rates, we are billing our air and ocean costs as a separate line item. We want to ensure the price we are charged for shipping is the same price that our clients are charged for shipping. When freight costs start to return to normal, we will pass any realized savings on to our clients.
When will things return to ‘normal’?
The idea of trade is quite simple but the past few months show just how much complexity is built into these systems. Pressure will lessen as our trading partners ramp up their vaccination programmes and begin to recover from the pandemic while additional support to help ease congestion at ports was announced this week. 2022 should bring much needed certainty back for pricing and scheduling.
And while the problems go on behind us, MaCher is here to look forward and create branded solutions for our clients for 2022, 2023 and beyond. We will do all we can to get your beautifully designed, ethically made and sustainably-sourced products delivered in time to delight your customers.