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The Crazy Shipping Crisis - Explained

Though the worse of the COVID-19 pandemic may seem to be behind us, the consequences on our daily lives are still in full throttle. The truth is the pandemic put a massive stress on more than just our healthcare systems; it hit the international supply chain – hard. And it’s only going to get worse as we approach the holiday season.

But…what does that mean?

In simple terms, it’s like a massive reverse domino effect where if one piece falls short, it keeps the rest of dominos from falling…on a massive, global scale.

Let’s see an example of this.

You’re on your phone, scrolling and you decide you want to buy a new desk. After all, you are going to be working from home for the foreseeable future, you might as well get comfortable. You go online and find the absolutely perfect desk, so you put it in your cart and proceed to checkout.

That order gets sent to the company that sells it and if they have it in stock, great! The warehouse, which is normally outsourced by the company that sells you the product, packs it up, prints the shipping label, the UPS picks it up and delivers it to your home. It’s that simple.

port at night

Now, what happens if it’s not in stock? What if 1000 people order the same desk at the same time? The company needs to order more desks. So, they talk to their manufacturing plant, which is usually overseas, and say: “Hey! We need 1000 desks”. Normally, this wouldn’t be a problem, the manufacturing plant just…makes them and sends them over.

However, in the midst of the pandemic, the manufacturing plants were closed down for weeks, meaning there were no desks being made. But the orders kept coming in. And when the manufacturing plants were able to finally open, they had to keep up with regular demand plus backlogs, with less workers available and less raw material, increasing the price of the final product in the process.

flying over port congestion

80% of goods are shipped by sea, so even if your desk was made, it was hard to find boats to send it on. Ports were blocked for a long time, causing shipping costs to skyrocket. Less ships on the water, means shipping is more expensive. But let’s just say that your desk gets made and put on a boat to the US. There has been so much shipping craziness in the last year, including a 1,312ft ship blocking the Suez Canal for 6 days, that now there are hundreds of boats just circling the ports on the west coast of the United States that cannot dock. Emptying these container ships is a slow process and with labor shortages also affecting the US, it’s increasing delivery times significantly.

Ok, but let’s just say that the boat that your desk is on is able to dock at the port and gets off the boat in a timely manner. There is now a scarcity of truck drivers in the US and the companies like UPS, FEDEX and even the USPS are totally slammed. And they don’t expect it will get better going into the holiday season.

port at night

Christmas in November

The conclusion is that if you want gifts for your loved ones this year, it’s better start acting now. The age- old saying “the early bird gets the worm” has never been more true! Remember that it’s not only shipping delays within the US that are the issue, but the enormous backlog at the ports is going to take weeks if not months to go through. Many retailers are already predicting they will run out of stock on certain products and won’t be able to replenish before the New Year.

We at Solgaard don’t want to be alarmist but can only agree and encourage our customers to get their shopping done extra early this year. Given the reality of the situation, we can only guarantee that orders placed before December 1st will arrive by Christmas. We currently have healthy stock numbers but they might not stay that way forever. So put on your Santa hat, crank up Michael Bublé and get in the holiday spirit!