“It’s delayed again?!”
An in-depth exploration of the continued delays plaguing the furniture industry
It’s safe to assume that at this point in the year 2021, everyone has had to deal with their fair share of shipping-related delays related to COVID-19. It is a problem spanning across all major sectors of the global marketplace, and it is especially noticeable within the industries of furniture and design. This is for a variety of reasons which we will outline below, but, if you’re like most people, the common response of “We apologize and we’re doing everything we can to resolve this issue” is no longer quite as satisfactory as it was in the past.
As we’ve all waited and waited for our delayed products, it’s only natural to be haunted by the questions that haven’t been adequately answered. What exactly is going on to cause this problem? Shouldn’t things be better by now? Why are delays in international ports affecting my “American Made” purchase? The questions can go on and on, which is why we’re here to provide more satisfactory answers to help alleviate some of the stress caused by these seemingly-endless delays.
A big problem in a BIG industry
To understand the cause of this problem, we need to take a closer look at one of the primary sources of all of our purchased goods: the international shipping industry. A quick consideration of this massive industry can bring about a helpful perspective. Here are a few quick facts to help us get a sense of the huge scale of today’s ports and cargo ships.
- There are 835 active seaports across the world.
- There are about 5,000 large container ships in operation today.
- The average container ship can carry 12,000 containers, each of which are 20ft long. (the largest ships can carry about 22,000).
- One 20 ft. container has an internal volume of 1,360 cubic feet. This means that the average cargo ship has the capacity to hold 14,560,840 cubic feet of goods (the largest holding 29,121,680ft³). That’s a lot of stuff!
- A large port receives 3-5 container ships a day.
- 7 of the 10 largest ports in the world are located in China.
- The largest international port is located in Shanghai, China. It is capable of docking 30 large container ships at one time and it can process over 40,000 shipping containers in a day.Over 40% of all containers coming to the U.S. come from China.
Fully wrapping your head around these numbers is a considerable task, and things only become more complex when you consider the unloading process. When a ship comes into any port, thousands of workers (up to 3,000 in ports such as the one in Shanghai) descend upon it to unload each and every container. The employees at the ports are divided into a variety of teams and task forces, and each have designated jobs to facilitate this process. In today’s world, many of these jobs include operating sophisticated heavy machinery like quay cranes, shuttle carriers, and large trucks.
It takes about 1-3 full days to clear all of the containers from a single ship and transport them to the port’s container yard. From there, the containers will need to be trucked to a container freight station before they are further deconsolidated and the goods inside transported to their final destinations. Major international ports across the globe unload multiple cargo ships every day, and each port is in constant communication with new incoming ships, their employees, and all of their clientele about the status of the containers of goods.
Modern shipping is an incredibly intricate process which relies upon precise scheduling, sophisticated machinery, as well as a wealth of human ingenuity and elbow grease. Once you really start to grasp the profound interconnectivity within this integral sector, it’s easy to see that it is particularly ill-suited to sudden changes. A slowdown in one port can have a substantial ripple effect in the loading and unloading times of other ports across the world.
Enter the Coronavirus
As we all know, COVID-19 originated in China and quickly spread to other nearby countries, followed by the rest of the world. Not only is a deadly pandemic a problem in highly populated countries, but China and many nearby countries are also major players within the shipping manufacturing industries. As early as January of 2020, China began putting huge swaths of the population under lockdown, and from then on countries around the world began to shut down major cities and ports, effectively halting most imports and exports for weeks at a time.
Needless to say, the international shipping industry was not prepared. All around the world, goods that had already been purchased were suddenly left stranded on ships that now had no usable ports. Cruise ships were turned away from city after city. Cargo-related congestion began to occur in every major port around the world. When this happens, businesses naturally start looking for other means of transport, such as via air or trains, but, like with the oceanic shipping industry, there is only so much influx each other industry can handle. Soon all players in the shipping industry were pushing lead times and raising prices.
Blockage not easily cleared
For those outside of the shipping world, the fact that there are still delays almost two years after all of this began can be a hard pill to swallow. Afterall, mankind has rarely met a challenge that we can’t overcome when we focus our full attention towards overcoming it. Can we not come together and fix something like congestion at our major ports? Are there no innovations to be made with our sophisticated technologies? Does anyone remember the Moon landing? Anyone?!
Much of the above is common knowledge. What isn’t so well known is how difficult it is for ports to “catch up” on backlogged goods. Port workers are highly-skilled and require extensive training to operate all of the various machines and tools used to move massive containers, and the same goes for employees on the cargo ships themselves. Finding and training new employees takes time, so simply ramping up the workforce is not something that can be managed quickly.
Another thing to keep in mind is that, aside from the initial lockdowns, COVID-19 has continued to find other ways to dismantle our close-knit society. Many businesses were able to have their employees work from home during the pandemic. This was not possible for most of the shipping industry. Throughout 2020, all of the hands-on employees at international ports were still expected to come into work everyday unless the entire port was closed, and despite mask mandates and social distancing, many port employees still came down with COVID-19. We learned early on that one of the worst aspects of COVID-19 is that a person can spread it long before they notice any symptoms. So what is a port to do when an employee informs them they’ve contracted the virus? Like any other business, they do a form of contact tracing and ask all employees who’ve been in close proximity with the contractee to stay home and quarantine for two weeks. You can imagine the chaos this causes to the highly-complex inner workings of these businesses.
Fast-forward to the present
As it stands today, the combination of workforce shortages and extended congestion has created conditions never before experienced in the shipping industry. Most international ports are dealing with a surplus of containers, but few have room enough to store them all. With storage space quickly running out, many ports are starting to “stack” containers in previously unused space. Now, to be clear, ports stack containers all the time, but it is usually in designated “stacking areas” with an efficient unloading system in mind to ensure each container is seen to in a reasonable amount of time. This new form of stacking is anything but efficient - this is stacking for survival. Containers are being stacked in whatever space is available without the same systematic unloading process in place. It is almost impossible for these containers to be unloaded fairly, and some containers which were placed at the bottom of a stack may not be addressed for quite a while.
The unprecedented congestion within the shipping industry is also causing a variety of related issues. One of these problems is that some container ships set sail with a destination in mind only to find that there are no available docks at their intended port. Because unused space in a shipping yard is a rare commodity, many ships are being held for longer than the usual 1-3 days. Many of these ships are having to anchor off shore for up to three weeks until they are finally allowed to dock at their destination, and, once they do unload, they are effectively removed from circulation rather than continuing on to their next port due to the unforeseen wait times. Starting in August of 2021, there have been reports of record numbers of container ships anchored outside of ports waiting for their turn to dock and unload, with as many as 100 ships seen waiting outside of the ports in Long Beach and Los Angeles.
Another new problem making its way through the industry is the lack of available or unused shipping containers. That’s right, because so many containers are being held up, stacked, and stranded, shipping companies are quickly finding out that there are no spare containers available for use on outgoing ships. If that wasn’t enough, on land there’s also a shortage of truck drivers to transport containers from the shipyards. Because of this, containers in some ports are sitting for up to two weeks rather than the customary 3-4 days, which is only compounding the other problems previously mentioned.
In spite of all these difficulties and others we haven’t even mentioned (anyone remember the container ship that blocked the Suez Canal?), there’s still plenty of demand for bookings on cargo ships. Although many people have struggled over the last two years, the amount of goods purchased by the population at large and the total shipping volume worldwide are actually higher than they were in 2019. This is, in part, thanks to the measures taken by world leaders to stop a global recession, such as increased unemployment aid, stimulus checks, and the enhanced Child Tax Credit in the U.S. An economic downturn might have at least made it possible for ports to start clearing the congestion, however, as it stands today, the standard of living for most people is almost unchanged, and the demand for shipped goods is higher than ever.
The perfect storm...to hamper furniture production
While demand for imported products has been steadily rising throughout the last 18 months, many businesses within the furniture and housing industries have seen an even greater increase in sales, which makes sense when you think about how the pandemic affected our daily lives. After COVID-19 became widespread, people everywhere began to spend more time at home. As they did, a significant number of people began to realize that there were aspects of their domestic lives that needed an upgrade, and, for many, the reaction to this was taking home new furniture, making home improvements, or by buying a new home altogether. Unfortunately, while the ongoing delays related to shipping were hard enough for our customers to deal with, there was a fresh set of problems brewing for many of the businesses that supply raw materials to the furniture and housing industries.
Increased demand for wood for both furniture and homes sounds like great news for lumber mills, but, surprisingly, this has not been the case. Lumber mills the world over also shut down in the early stages of the pandemic, and like the shipping industry, the lumber industry is also one that is not particularly well suited to sudden changes.
Starting with the source, it takes anywhere from 7 - 50 years for a tree to reach harvestable maturity. Additionally, many lumber mills operate on a tight budget and cannot ramp up production quickly, especially when so many are now paying exorbitant costs for shipping. Finally, it’s hard for most mills to hire new workers due to ongoing COVID restrictions. The result of all this is that lumber mills have raised their prices substantially, and, when combined with extreme shipping delays, this means that many businesses that produce furniture are struggling to obtain wood, even those right here in the USA.
Along with wood, another widely-used home furniture material has been undergoing a severe shortage, and, surprisingly, this one wasn’t caused by COVID-19. Polyurethane foam is found in virtually all types of upholstered furnishings as well as most types of mattresses, and many of the companies that manufacture the chemical components used to create this foam are located in the great state of Texas. In February of 2021, Texas experienced blackouts due to some problems related to cold temperatures, power storage, and infrastructure. These blackouts caused production of the Polyurethane foam to stop for multiple weeks, and many chemical-producing companies had to stop ordering supplies until the problem was fixed. Once these businesses opened again, it was hard for them to ramp up production due to the extreme congestion within the shipping industry.
By the end of the summer things were looking a little better, but Mother Nature had one more surprise up her sleeve. On August 29th, 2021, Hurricane Ida slammed into Louisiana and the coast of Texas. This category 4 storm caused damage and widespread flooding to the area which made it near impossible for many of these companies to receive supplies and move their products for a 3-4 week period. Needless to say, it has been challenging for all of the parties involved to recover from these delays, and the lack of this extremely important material is causing continued difficulties for furniture and mattress manufacturers.
A new shutdown in Vietnam
In the spring of 2021, many of us were starting to feel that we were turning a corner. Vaccines became available to all Americans. Numbers of infections were plummeting in almost every country. But just as things were getting better, the Delta variant arrived. Countries handled the new influx of COVID cases in a variety of ways, and many outside of the US implemented a fresh round of shutdowns.
So far, the most important of these more-recent shutdowns in regards to furniture took place in Vietnam. Vietnam is one of the world’s largest producers of both furniture and lumber used to make furniture, and one of its major ports in Ho Chi Minh City has been partially shut down since August 1st, 2021. At the time this article was published, the port was still running at diminished capacity, and, to make things worse, a significant number of furniture manufacturers in the area have also been forced to shut down to stop the spread of the Delta variant.
An optimistic view of a frustrating situation with no easy solution
With a fresh perspective into the myriad of complex problems causing delays, we hope that our readers understand just how much we sympathize with the frustration caused by COVID-related delays! It is affecting all parts of our business, and we are, for the most part, unable to do anything about it. It is truly an international problem that can only be solved by enormous international effort. Rest assured, we are doing everything in our power to ensure our customers can receive their purchases in a reasonable amount of time, and we aren’t going to stop anytime soon.
While the situation in general may leave you feeling bleak, there is something that we here at Furniture Row strongly believe, and we hope everyone will keep it in mind: Things will get better!
Time and again, mankind has pulled together to accomplish incredible goals and solve impossible problems. We may have to deal with inconveniences like delayed products for a little while longer, but this virus won’t slow us down forever. As always, the human race will come together, innovate, and solve this problem like we have so many in the past. And, like every other challenge, we will come out on the other side stronger, more resilient, and more appreciative of all that we do have.
Recent Congestion problems:https://www.cnbc.com/2021/09/01/supply-chain-delays-wont-be-easily-fixed-and-trouble-will-continue-into-next-year-commentary.html
Foam Shortage (and other info)https://fortune.com/2021/05/18/furniture-delivery-delay-reasons-shortage-short-staffing/
Vietnam port closurehttps://www.maritime-executive.com/article/vietnamese-terminal-suspends-some-operations-due-to-covid-19-surge