After extensive disruptions last year, the Delta variant has thrown the global movement of goods further into disarray. Bergstrom’s vendors are backlogged and tacking on huge fees to their shipments. Glass and paper shortages are delaying her deliveries.
She’s far from alone.
Eighteen months into the pandemic, supply chain woes continue to plague retailers throughout the country, leaving store owners scrambling to determine what the next few months will hold. The lingering troubles have been compounded by the surge of Delta, ongoing labor shortages, and a downward shift in consumer sentiment, which hit a six-month low last month. Global supply systems — from factories to ports to freight carriers — have been under such strain, for so long, that experts say it could wreak havoc on the holiday shopping season, which accounts for the majority of sales for many retailers.
Bergstrom is laying out tens of thousands of dollars on merchandise for holiday shopping season but isn’t really sure what will arrive in time. So last month, she asked all of her manufacturers to ship the rest of the year’s orders ASAP rather than over the coming months.
“Send me everything,” Bergstrom said she told them. “I want it now.”
In August, she began showcasing glitter trees, snow globes, and ornaments prominently in her store. In the Before Times, she wouldn’t have flipped the holiday switch until October.
“The future is uncertain,” she said. Better to sell the snow globes now, she reasons, who knows what might happen next?
Consumers, who before COVID-19 could remain blissfully ignorant of how goods were produced and shipped, have now become accustomed to stock shortages or delivery delays. But supply chain issues that began with a rush on hand sanitizer and toilet paper in March 2020 have actually grown more difficult as the pandemic drags on.
“The big picture is that you’re seeing ongoing demand outpacing supply of everything,” said Jon Gold, vice president of supply chain and customs policy for the National Retail Federation. “The entire system is strained and there’s no one piece that’s going to fix it.”
Early in the pandemic, the problem was getting products through global ports that were shut or understaffed. But the goods had at least been produced. Today, the supply chain is damaged at every link, said Gold, while demand has recovered. Shipping volumes were so high in August, he said, that he’s projecting that they will set a record this year.
But disruptions still abound. COVID has ravaged workforces in some of the globe’s manufacturing hubs; India imposed a lockdown during its surge, and parts of China and Vietnam are currently doing the same as they face ongoing waves of the virus. Unexpected climate events like February’s deep freeze in Texas have stalled the assembly both of finished products and the components needed to produce them, such as the foam in couches or computer chips in cars.
Shipping, too, has been stymied by congestion, making it nearly impossible for companies to secure empty containers. Getting a container into port is also increasingly tough: This week a record 56 ships were stuck waiting outside the massive ports of Los Angeles and Long Beach. It’s gotten so frustrating — and expensive — that many companies are now trying to fly goods into the United States, Gold said, as the price of air freight has grown more competitive with ocean vessels. But because fewer planes are flying, that’s not an option for everyone.
And when a shipping container makes it to land, there are more challenges. Too few longshoremen to unload goods. Not enough warehouse space to store them. Trucking companies can’t find drivers, making it harder to distribute goods across the country and into fulfillment centers and stores. And once the goods do arrive, retailers are struggling to keep staff.
Couple all these problems with the fact that August and September are the busiest shipping months of the year — it’s typically when all of the products that will be sold during the holiday season are in transit — and the supply chain is in chaos.
“It’s very much like a person that has been sick with multiple illnesses, and your immune system hasn’t come back and then boom you’re hit by something else,” said Nada Sanders, a professor of supply chain management at Northeastern University.
The difference this year is that, unlike in 2020, shoppers were back, lifting spirits, revenues, and expectations. Retailers like Alison Barnard O’Brien, owner of Injeanius, a denim boutique in the Seaport, saw a huge wave of spending this spring.
“My business has been open for 16 years and I had probably one of my best months ever this past May,” she said. “Post-vaccine, everyone was like, ‘I just need to get out and I need a new wardrobe.’ ”
But now, styles she ordered six months ago aren’t showing up. The cost of cotton is rising. It’s been harder to restock her hottest brands — like Mother Denim or AGOLDE — so she’s been supplementing with newer, lesser-known labels. And with high shopping season approaching, she’s shifting her approach to sales.
“With customers, we’re not a hard sell. Typically, you buy it because you love it, you want it, it looks great on you,” she said. “But now, I’m telling people, ‘If you really love it, you can’t really wait. I don’t know if I can get you another one.’ ”
Indeed, as retailers try to figure out how to stock up for the holidays, they’re trying to figure out if they can secure goods at all.
”We know there are going to be shortages in key products,” said Keith Jelinek, the managing director for business advisory firm Berkeley Research Group, where he helps companies manage inventory. “Not everything that everyone ordered is going to get there in time.”
He’s been counseling his larger retail clients to switch up their strategies, keeping things in warehouses instead of shipping it all to stores, so that they can later funnel products to where sales are strongest. And he’s suggesting fewer discounts — maybe a 30 percent sale on that speaker system instead of 40 percent — as a way to offset surging freight costs. This holiday season, he added, all stores should nudge shoppers to start early or buy gift cards as a way to manage customer expectations.
That was the not-so-subtle message sent just before Labor Day weekend from Talbots’ CEO Lizanne Kindler, who penned a word of warning to her customers: The production of the brand’s fall and winter collections was behind schedule, so they should be patient for new blazers and sweater dresses to arrive in stores.
Like many retailers, “we are experiencing delays in our supply chain due to the ongoing impact of the pandemic,” Kindler wrote. “We anticipate this to be ongoing over the next several months to come.”
And there was a far more blunt note from Chris Butler, the chief executive of National Tree Co., a seller of artificial firs and spruces. Consumers “hoping to buy a holiday tree and other decorations this holiday season better do so before Thanksgiving or risk paying through the nose or not having anything at all,” he said in a news release.
Jon Hurst, president of the Retailers Association of Massachusetts, said retailers of all shapes and sizes are feeling the squeeze, making that must-have gift that much harder to find as the holidays draw near.
“We all know that inventory levels for all types of stores has been inconsistent and often low through out the pandemic,” he wrote in an e-mail. “You can see that some could be short on choices, particularly the closer we get to the holidays.”
The best way to avoid the problem? Start shopping now.