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Update: Product Supply Chain and the Holiday Squeeze

On the product supply chain

As we look towards the final months of 2021 and the holiday season, we see a continued strain on our industry’s product supply chain that will remain critical. The instability is a direct result of “a dramatic lack of [freight] capacity and warehouse workers” coupled with a commodities boom as the economy recovers from pandemic-related shutdowns (American Journal of Transportation). Experts expect the situation to remain precarious at least through February 2022 (Wall Street Journal). It’s more important than ever to plan ahead for campaigns and seasonal gifting.

What should you expect? 

This holiday season through early 2022, you will see 3 areas of your gifting and promotional campaigns impacted:

1. Pricing 

According to the Wall Street Journal, “the average price world-wide to ship a 40-foot container has more than quadrupled from a year ago [2020].” Most suppliers in our industry are forced to bid competitively for container space against retail giants like Wal-Mart and Amazon. Thus, a mid-year price increase, with potential for further increases, became a necessity to accommodate this additional cost. 

2. Lead times

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

3. Inventory

Many of our suppliers have forecasted accordingly and are at peak inventory levels in preparation for the holiday boom, but with the longer lead times to replenish, they may not be able to keep pace with demand. Additionally, holiday programs that are typically produced in an overseas partner factory may move to domestic stock, wiping out stateside inventory more quickly than anticipated.



What can you do?

When possible, give your campaigns some extra time and bring in your Brand Consultant early. They are in touch with our factory partners and importers on a daily basis, and are ready to work with you to deliver your campaign on budget and on schedule.

For the holidays, start your gifting conversations now so that you’ll be better positioned for an on-time (and enjoyable!) delivery. The earlier you can place your order, the more advantage you will have on price and available stock. Your Brand Consultant is ready to share their favorite ideas for gifts that will be kept, used, and appreciated this holiday season, and we have some exciting resources coming your way soon.  

Plan ahead. Be prepared. Get ready to delight.

Reach out to your Brand Consultant to start the end-of-year gifting conversation. Don’t have one yet? Get in touch now to see what our team can do for your brand.

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