January 2022: the state of supply chains
January 20, 2022
As we turned the corner on another pandemic year, COVID continues to affect worldwide production due to global supply chain issues, volatile stock levels, and labor shortages. Our team recently attended the PPAI Expo 2022, which is the promotional product industry’s largest event of the year. A focus at this year’s expo was updating industry professionals on the latest supply chain news.
Guest speakers included John Janson, Senior Director of Global Logistics for SanMar, and Kyu Lee, President and CEO of JMTek, LLC, a Chinese manufacturer. They presented a high-level overview of the many factors impacting supply chains. In offering a candid, realistic perspective on the challenges we will continue to navigate in the coming year, their briefing ensures we have reasonable expectations for 2022.
In sharing this information with customers, our aim is to provide awareness and understanding to the issues impacting swag availability and fulfillment. We’ll also share how Printfection is responding to them.
What factors are impacting global supply chains?
Delays and Congestion at Shipping Ports
- Only 38% of shipping vessels are arriving on time to the U.S.
- Ships are now required to sit 150 miles offshore instead of right off the port to clear congestion, which increases costs as shipping companies then must charter additional crew/food while waiting to dock.
- 50% of the containers in the world are sitting in the U.S. and are not getting back to China to reload products.
Manufacturing and COVID in China
- China is taking an aggressive approach to lockdowns in an effort to reduce the spread of COVID, which impacts supply routes, closes warehouses, closes ports, etc.
- The busiest port in the world (Port of Ningbo) was closed for 2 weeks because of 3 COVID cases.
- Some factories don’t have the raw materials causing a hold on production of goods.
Domestic Shipping and Transportation
- UPS and FedEx have so much business, they are starting to turn it down. It is becoming harder to ship residentially because it isn’t as cost effective.
- There is a major truck driver shortage. The federal government is looking to drop the legal age of truck drivers from 21 down to 18 to address this.
- Air freight is harder to come by now because rates have tripled. Capacity has dwindled because COVID testing kits and vaccines get priority.
How is Printfection responding and adapting?
We continue to stay in constant contact with our suppliers and UPS to ensure large projects and known deadlines on projects are being communicated. We are also continuing to increase our staff both within Printfection and at our Fulfillment Center to account for increased order volume and longer timelines.
As these factors are global in nature and not isolated to the promotional products industry, we unfortunately do not have much more influence or control to change the current environment. With that said, we will continue to serve all our customers with excellent service and will communicate any updates as we have new information.
What can customers do about it?
We encourage you to work closely with your Customer Success Manager on any deadlines or large projects you have coming up and if you have further questions please contact your CSM or firstname.lastname@example.org.
As a reminder, if you are ordering new merchandise please place your orders ASAP to avoid changes in stock levels. We cannot reserve or hold stock until an official order is placed through our platform, so making decisions in a timely manner is the best way to ensure you get the items you need!
We thank you in advance for your patience and understanding as we partner together on your swag management needs. As always, we welcome any feedback you have.