Whether it's by land, sea or air—retailers are seeing delays in product delivery, which has many concerned about the upcoming holiday shopping season.
Experts are predicting holes in the supply chain as early as September due to COVID-19, and that could change what products businesses receive—and when.
From COVID-related shutdowns, to the blockage of the Suez Canal, to a global chip shortage, nearly every industry has experienced bottlenecks in the supply chain since the beginning of the pandemic, with few signs of easing before the holidays.
Big retailers and smaller businesses alike are feeling the pinch.
"We're definitely seeing delays," said Lina Dickinson, owner of Kansas City-based Mer-Sea, which sells clothing, accessories and scented products made in the U.S. and around the world. "It's taking a lot of diligence and flexibility on our part. We're staying ahead of it, but it's not without challenges."
John Higginbotham, Oklahoma City market CEO for Bank of Oklahoma, said one of his clients isn't immune to the struggles.
"They currently have more than 2,000 containers stuck at sea outside of China," he said. "Even with all of their expertise and contingency plans, they're not safeguarded from these kinds of issues."
Void in the market
As a brand based on travel and wanderlust, it's only fitting that Mer-Sea sources items from all over the world.
Some Mer-Sea products, such as candles and bath and body products, are manufactured in the U.S. while others, including clothing, accessories and tapestries, are sourced internationally.
"In the U.S., our biggest issue is components—like jars, bottles and things like that," Dickinson said. "There's a void in the market."
Other Mer-Sea products are made in Ecuador, Turkey, China, Morocco and Nepal, among other countries.
"The hardest hit, at least among our vendor relationships, has been India," she said. "It's been really, really tough for them. China, for us, was okay in 2020 because so many people canceled their orders. It's been much harder, with longer lead times, in 2021."
By contrast, many of the products from Morocco are made in the homes of local artisans in small communities. Their work was uninterrupted because the creators were able to safely stay home and were not subject to brick-and-mortar business closures.
Higginbotham said 85% of his client's goods made internationally come from China, with the remaining imports come from other markets like Vietnam and India.
While each country is handling things a little differently, many have barred international travelers from entering their borders because of the pandemic.
"So, companies are no longer able to send their buyers to markets and vendors in those countries to see and sample product in person," he said. "More is being done online now, and many manufacturers are sending large numbers of samples to the businesses so they can still see the product they're ordering, while limiting possible exposure to COVID due to travel."
Planning ahead, playing catch up
Production isn't the only issue, Dickinson said. "Delivery is a whole other story. For small businesses, it's impossible to plan ahead enough to circumvent delivery delays. Major retailers can probably order larger amounts ahead of time, but smaller businesses like ours can't necessarily afford to do that."
She said smaller shipments are a double whammy—both more expensive and lower priority for shippers. "Even if your order is broken into four different shipments, that doesn't mean you'll get your products," she explained. "If a pallet is bumped from that shipment, it will be yours if you're a small business. There might be a delay getting a port, then a delay getting on the boat, then a delay in Los Angeles where there aren't enough workers to unload it."
Mer-Sea has done some air shipments, which are more expensive, but not as expensive as the risk of not getting the goods at all.
"It's a logistical mess, and it's hard to keep track of," Dickinson said. "Just because a product gets to the states doesn't mean you have any assurance you'll get it in a reasonable time. It's definitely affected our budget."
Mer-Sea put a lot of their 2021 orders in early—luckily.
"We learned from last year, which was a total disaster," Dickinson said. "In 2020, we put orders in early in the year and everything just shut down, so we got some of our holiday items two or three months late—which was huge in our biggest selling season of the year."
Higginbotham said his client was able to order early, often and in larger quantities because they could order at scale.
"They built a two-month cushion into their delivery time, just in case," he said. "And normal delivery is already a few months in advance of the holiday or season.
"Since a portion of their operation is seasonal items, this means a shorter selling window. They're confident they'll get all the holiday merchandise in, and that it will sell—just in a much shorter window."
He said if the problem persists, shorter selling windows could mean higher prices for consumers. "Businesses will be forced to sell more, faster," he said. "And they may have to make up extra shipping expense."
“Businesses will be forced to sell more, faster. And they may have to make up extra shipping expense.”- John Higginbotham, Oklahoma City market CEO for Bank of Oklahoma
Despite the headaches and roadblocks, both retailers remain optimistic about the upcoming holiday season. "Things are complicated and messy, and a little more expensive, but I'm optimistic we're eventually going to get everything we need for the holiday season this year," Dickinson said.
Higginbotham said his client, and others, are being realistic but thinking it will all work out. "They recognize the risk but feel good about the overall situation," he said.
"It's taught us to pay attention, be flexible, and pivot more quickly," Dickinson added. "We all know it's out of our control, so customers are being pretty compassionate and understanding about it.
"Consumers won't see all the behind-the-scenes hoops companies have to jump through to get items on shelves or in online shopping carts. So for shoppers, I think the holiday season will feel as robust as it has in previous years. The brand might be a little different, the price might be a little different, but the items will be available."
“The brand might be a little different, the price might be a little different, but the items will be available.”- Lina Dickinson, owner of Mer-Sea