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Supply Chain Issues Impacting Corporate Holiday Gifts

Jason Liburdi October 18, 2021
Supply Chain Issues Impacting Corporate Holiday Gifts

Businesses need to make decisions regarding their corporate holiday gifts now to ensure delivery before the holidays. In previous years, product suppliers built up their inventories in preparation for the busy gift-giving season. Rush production and expedited delivery options were often available.

This year, the script has been entirely flipped. Suppliers are struggling just to maintain normal inventory levels, let alone secure additional product for the holidays. Shipping times are also running longer than usual, compounding the situation and making lead times for branded products and apparel longer than they’ve ever been.

Many manufacturers have been hesitant to announce their holiday items because of uncertainty regarding arrival dates. Every day, we’re seeing expected in-stock dates pushed back and new item launches delayed. In many cases, normal 40 day lead times are doubling to 80 days. Even global juggernauts like Nike aren’t immune.

Let’s look at all the factors that have created this perfect storm:

COVID-19
The pandemic has thrown a wrench into every link of the supply chain. Shutdowns in Asia months ago have created ripples that are just now being felt as factories struggle to catch up with production commitments.

Cash Flow Issues
A large number of factories are not accepting new orders because they simply don’t have the cash. Their receivables are being stretched by slow payments from sellers who have faced downturns and closures. Consequently, many manufacturers are short on cash and cannot purchase raw materials needed for production.

Power Outages
On top of that, rolling power blackouts stemming from a coal shortage have plagued Chinese factories. Government officials in the country have ordered their mines to step up production, but it will take some time before supply catches up with demand.

Port Delays
There are massive shipping container backlogs and port delays. At one point earlier this month, 65 vessels were parked outside of California Ports waiting to dock. Labor shortages have also hit harbors causing an average delay of 8.7 days for container unloading.

Shipping Delays
Labor challenges have impacted transportation and delivery, as well. UPS, FedEx, and trucking companies are all facing turnover and hiring challenges, and that’s not to mention the incredibly high volume they’ve been managing for months now after the nationwide shift to online shopping.

Supply Shortages
Finally, many Asian factories are encountering raw material shortages for many and all the reasons listed above.

The result of all these challenges is a worldwide shortage in promotional items and apparel. Inventory across the board is down at a time when suppliers would ordinarily be stocking up. And when inventory does arrive, it’s often gone before stocks can be replenished.

Rest assured that holiday gift-giving has not been canceled; it’s just going to require some prioritization and planning.

What’s important right now is that you decide on a theme and then nail down your budget. In short order, you’ll need to start selecting gifts. You’ll also want to have a few backup options in case your primary gift choice isn’t available.

We decided to hold off on publishing our holiday gift guide until this week to ensure we present items with plenty of stock (for now). That said, time is now of the essence.

If you have questions regarding inventory and lead times, please feel free to contact us. We are speaking with suppliers every day, so we have real-time intel on item availability and ship times. Also, our vendor relationships and purchase volume ensure our clients’ orders go to the front of the line, so if you’re getting a “no” from your normal sources, we may be able to help!

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