In the News: The Supply Chain's Squeeze On The Holiday Surge

Satellite images below, collected from the European Space Agency’s Sentinel 2 satellite, show congestion over the course of the last 12 months at the port of Los Angeles. Each dot represents the ships large enough to see from space. The images were taken at the middle of each month.

As we rapidly approach the final months of 2021 and the holiday season we see a continued strain on product supply chain. The instability results from a dramatic lack of freight capacity and warehouse workers coupled with a commodities boom as the economy recovers from pandemic-related closures. Experts predict the situation to remain precarious at least through the holiday season and Chinese New Year (February) 2022. 

What to expect

It’s more important than ever to plan in advance. The main supply chain impacts on gifting and promotional campaigns are likely to be:

1. Lead times

Labor shortages and COVID-19 protocols have limited the supply of port workers and domestic freight drivers. Without a reliable workforce to offload and transport goods on arrival, there is a vicious cycle of containers waiting at ports for weeks longer than normal. Delays in stock replenishment, coupled with staffing shortages have forced manufacturers to get creative with production schedules. Many anticipate that they will have to cap their production capacity earlier in the season.

2. Inventory

Some brands have forecasted accordingly and are at peak inventory levels in preparation for the holiday boom, but with longer lead times to replenish, they may not be able to keep pace with demand. Additionally, holiday programs that are typically produced in an off-shore facility may switch to using domestic stock, wiping out stateside inventory more quickly than anticipated.

What you can do

When possible, give your campaigns some extra time and consult your Account Manager early. For the holidays, start your gifting conversations now so that you’ll be better positioned for an on-time delivery. The earlier you place your order, the more likely you'll be able to take advantage of available stock. 

Plan ahead. Be prepared. Get ready to smile.