Industry Supply Chain Ravaged by Global Pandemic
From inventory shortages to price increases and just about everything in between, by now your business has certainly hit a hurdle (or several hurdles) due to supply chain woes in the custom apparel industry caused by a global pandemic that’s far from over.
With no foreseeable relief, the best course of action at this point in time is to arm yourself with knowledge and awareness so that you can best prepare your business. Develop a strategy that works for you and your market, your customer base. This strategy may not be a one size fits all solution.
Once you’re able to truly understand the issues facing the industry and specifically your niche within the industry, you’ll be able to have transparent, open dialogue with your customers about the changes they will face in the months to come.
Inventory Shortfalls
Perhaps the most obvious and talked about product shortage resulting from COVID-19 has been blank apparel. While suppliers have done a fantastic job communicating the shortfalls, it’s been a challenge for decorators to source from a single supplier - often having to spend exorbitant amounts of time shopping around at different wholesalers to complete a single job.
These shortages stem from a worldwide shutdown which at its core centered in a region known for mass production of blank garments. Additionally, many manufacturers pivoted at the onset of the pandemic to produce PPE while halting production of blanks like t-shirts, sweatshirts, and hats.
Another very concerning, yet less talked about raw material shortage to be aware of is plastisol ink. Plastisol ink is the primary ink used to manufacture screen printed heat transfers. According to ASI, there will reportedly be rationing of these types of ink: “Producers are placing ink/materials vendors on “force majeure” – a legal technicality that allows them to break contract commitments they’d made to provide certain levels of product due to unforeseen circumstances. Relatedly, ink sellers are, in some cases, only allowing apparel decorating shops to buy a limited amount of ink.”
Port Congestion
As I write this, there are a record number of cargo ships waiting to dock off the coast of California. To be specific, 97 ships were at Los Angeles and Long Beach ports. Before the pandemic, the typical number of ships waiting to dock at one of these ports would be zero or one. According to Business Insider, “Earlier this year, the backlog showed signs of abating, after hitting a record high in February 2020, when the onset of the pandemic and panic-buying wreaked havoc on global supply chains. But last month the ports began to beat out February's record, as COVID-19 shutdowns and a labor shortage met a boom in demand from e-commerce and preparation for the holiday shopping season.”
These parked vessels are carrying a vast collection of raw materials used to produce not only screen printed heat transfers, but likely many of the other day-to-day necessities your business relies upon - creating perhaps the largest interruption to our everyday workflow. What once took days to arrive could now take weeks to months with no reliable delivery date, creating a treacherous environment heading into the busiest time of year for apparel decorators.
Shipping rates
Port congestion, shutdowns, and other unrelated issues (think cargo ship blocking the Suez Canal) have sent container shipping costs soaring. According to The Economist, “The average cost of shipping a standard large container has surpassed $10,000, some four times higher than a year ago. The spot price for sending such a box from Shanghai to New York, which in 2019 would have been around $2,500, is now nearer $15,000. Securing a late booking on the busiest route, from China to the west coast of America, could cost $20,000.”
check out this infographic from asi
Domestically, both UPS and FedEx have implemented peak surcharges on top of their already rising rates. With shipping demand soaring from escalating online sales and a tight labor market, parcel delivery has struggled to recover from pandemic related hit after hit. According to FedEx, surcharges will range from $1.50-$3.00/package depending on the ship date. While the surcharges from UPS are more detailed, you can read more about them here.
Labor shortage
A labor shortage has contributed to longer turnaround times industry wide.
Drive by nearly any strip mall or industrial park in America and it’s clear - there’s a significant and widespread labor shortage. From major corporations to small mom and pop shops, finding qualified help in today’s landscape is a challenge at best. The shortage of workers has made for longer turnaround times industry wide, as well as rising operating costs. Regionally, we’ve seen a 3% increase in labor costs alone.
According to ASI, “The just-released Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics showed that there were 10.9 million job openings in the United States as of the last business day of July, the most recent period for which numbers were available. That was an issue, as there were only 8.7 million people out of work and seeking employment in July, creating a shortfall of 2.2 million between openings and available would-be workers.”
Moving Forward
If there’s any glimmer of hope in this mess, it’s that we’re all in the same boat so to speak. We’re all facing the same issues and we’ll all get through them together. Lean in to the challenges and face them head on, knowing that there’s a support team available to you at every turn - from your favorite sales reps to your fellow apparel decorators in industry Facebook groups. Ask questions, share advice, stay positive, and be kind. It’s a stressful time and a little kindness goes a long way.