Hotel FF&E Supply Chain Update: Even More Stressed
The global pandemic’s far-reaching effects have created tremendous challenges in the hotel FF&E supply chain. Unfortunately, due to additional factors not related to COVID-19, the supply chain is even more snarled now than it was before. Many hotel projects are delayed and unable to finish on schedule.
Hotel FF&E Shipping: Asia Delays
In two January posts, we provided visibility into hotel FF&E shipping delays from Asia and what one hospitality furniture manufacturer is doing to try to mitigate them. These delays for imported goods set to deliver to hotels undergoing construction or renovation were worse than we had seen in a very long time. The slowdowns, which also drove shipping costs up significantly, came from four primary factors:
- A surge of orders, especially from consumers stuck at home in the US and ordering online, has created so much demand for shipping containers in Asia to carry the goods across the Pacific that it is oustripping the supply of containers
- A shortage of vessels cannot meet the demand to carry all of the containers from Asia to the US
- Congestion in US ports has increased the time it takes a boat to enter port, dock, and unload cargo, so ships full of containers are stuck in port for weeks longer than usual
- Ground transportation (truck and rail) equipment and personnel scarcity mean that even once the product comes off the ship, it takes longer to get to its US destination
Hotel FF&E Shipping: New Delays
Many in the hotel FF&E industry thought we would see improvement by now and that things would begin to normalize. But unfortunately, the situation has deteriorated further. Innvision has received recent communications from several manufacturers across unrelated product categories who warn of newer supply chain obstacles they are facing, along with more of the previous shipping issues that will delay deliveries through the end of March, if not longer.
For example, the crippling February winter storms and prolonged power outages that hit Texas so hard disrupted producers of an essential material in the polyurethane foam used throughout soft-seating and related upholstered goods. This suspension and continued delays for foam producers have led to a severe supply chain shortage of foam and other poly/pad supplies to the hotel furniture market and other foam-dependent industries.
Foam suppliers have notified soft-seating manufacturers of an ongoing foam shortage that will impact their upcoming production. Producers of sofas, lounge chairs, and other seating are now warning of two-week delays for orders scheduled to ship on or after March 22nd. These longer lead times will last as long as the foam shortage lasts.
Suppliers of other US-produced hotel FF&E products are experiencing slowdowns due to both the February winter storms and a combination of complex ground transportation issues. In Texas, Colorado, New York, the Midwest, and other parts of the country, reduced terminal capacity, restrictions on the number of pickups and size of shipments, complete closures of certain freight regions, and spikes in freight carrier rates are wreaking havoc on shipments delivering via truck.
Manufacturers of products coming from Europe are telling Innvision about unprecedented delays from not enough shipping containers, delays in loading them, challenges securing space on vessels, rampant overbooking, as well as ships’ reducing closing and cut off times, and even cancelling long-term contracts. We are hearing more of price hikes imposed by the steamship lines and freight forwarders, along with increased fines for missed bookings. Port delays continue to grow with added congestion, driver shortages still are a problem, and rising overall demand puts even more pressure on an already stressed sector.
Hotel FF&E Shipping Delays: Addressing The Issues
In response to the global supply chain issues, we are seeing some American casegoods companies with overseas manufacturing rapidly but permanently moving production operations from Asia to North America. Product lead times will shrink considerably with this trend, and costs are unlikely to rise much, especially when you include the cost of freight. More manufacturing on this continent also bodes well longer-term for the economies of the United States, Mexico, and Canada.
Things are tough all over for the hotel FF&E supply chain these days. With so much up in the air regarding the lead times of imports, procurement providers such as Innvision look to source as much as we can from US producers. Although not foolproof, we can usually count on faster, more predictable deliveries and shipping expenses working with domestic suppliers.
Innvision specializes in communicating with clients regarding possible delays in shipments, regardless of the cause, and working with vendors to optimize delivery dates. Especially in challenging times like these, hotel owners want a full-service FF&E provider who looks out for them and their hotel projects, solving problems and tackling potential issues before they arise. For a free consultation or just to learn more, click or call Innvision at www.innvision.net or 888-875-6202.