By Leigh Smith | April 13, 2021
As you have been shopping in the last few months, you may have noticed price increases, long estimated ship dates, and messages about lack of product availability-some of the most notable products being furniture, appliances, and flooring. All these issues can be attributed to freight wars and container congestion in ports. We understand how frustrating this issue is as we are starting to return to “normal” life, but we are here to explain a little about what has been going on in the world of logistics.
In the world of flooring, suppliers noted that at the beginning of COVID-19, prices for containers were around $1,2000. Those same containers now cost anywhere from $6,000 to $9,000. This massive inflation is being caused by freight wars. Companies like Walmart and Amazon drive the prices up, bidding higher and winning more containers, leaving smaller companies struggling to meet or out-bid these industry giants. Continuous consumer demand only adds fuel to the fire. The reason these companies are willing to pay these extraordinary costs is that containers are in such limited supply, and it’s a race to see who will win space on shipping vessels.
Image Source: Freightos – fbx.freightos.com
Before the pandemic hit the United States in March of 2020, there were already shortages in shipping containers coming out of China. As the virus spread globally, the production of containers slowed even more as companies expected to see a decline in trade. This was not the case. As governments sent out stimulus checks and families were unable to spend money on vacations and experiences, the call for goods skyrocketed. A surge in e-commerce shopping created a rise in demand that no one could have expected. A lack of port workers, limited staff in manufacturing plants, and minimal available shipping containers all compounded on top of each other and created somewhat of a gridlock in product availability and shipping delays that we still see today.
You may be wondering, “why are American-made products seeing price increases and prolonged shipping dates?” Many companies have started expanding their footprint within the states as consumers have been increasingly interested in American-made products. The issue here is that most raw material is being imported from other countries like China, India, Canada, and Germany. These raw materials are sitting in a port, waiting to be sent to manufacturers.
Congestion at ports is another huge problem that is causing lead times to increase. With such booming demand for goods, docks are full, and ships may sit for days before dock workers can unload them. Due to the pandemic, there is a significant workforce shortage and COVID-19 outbreaks within ports significantly increase this delay. As ships sit full of cargo, we are unable to send any of our products out or return empty containers needed to keep trades flowing. For every 100 containers that arrived in the United States, only 40 were exported back to China, meaning the remaining 60 sit and continue causing congestion.
There is no quick fix to this issue, and chances are we will be seeing these delays for months to come. You can be assured that we are working closely with our manufacturers to stay in the loop on product availability and shipping timelines. In the meantime, you can stop by our showroom and view hundreds of beautiful floor and tile options for your project. Visit our warehouse to view our collection of in-stock products, including hardwood, carpet, and luxury vinyl flooring!