Friday, July 9, 2021
Logistic hurdles have crippled the furniture industry and led to delays in product delivery. There are backlogs that are further slowing down the process. Logistics bottlenecks are adding to headaches for furniture makers as they scramble to catch up with pandemic-driven demand for home furnishings.
“We have the furniture made but the trucking companies say they can’t come get your stuff because they don’t have the equipment to move it,” said Rob Spilman Jr. , chief executive of Bassett, Va.-based Bassett Furniture Industries Inc. “Our retailers don’t have enough people to unload the trucks…It’s actually causing us and others to not run production.”
He said scarce warehouse space, labor shortages and a dearth of trailers are hampering manufacturers’ efforts to reduce order backlogs for items like sofas and desks that consumers ordered in droves during lockdown.
Bassett’s backlog is about seven times as large as pre-pandemic levels, Mr. Spilman said. The challenges come as companies such as Bassett, La-Z-Boy Inc. and furniture chain Room & Board Inc. are already grappling with supply-chain upheaval, including rising shipping and materials costs. Manufacturers have been adding extra shifts and scouring for new sources of commodities like wood for framing sofas in an effort to ramp up production.
The supply-chain congestion is putting a lid on Bassett’s ability to benefit from the resurgent American economy. The company reported $124.1 million in second-quarter sales, a 94% year-over-year increase, but revenue would have been “much higher…if in fact we had a normalized supply chain and logistics situation,” Mr. Spilman said. “We fought like the dickens to produce what we did.”
Even the company’s own logistics arm, which specializes in moving furniture for manufacturers, is facing headwinds. Warehousing and storage operators added 13,600 jobs in June, the biggest one-month gain in the sector since November 2020, according to seasonally adjusted preliminary employment figures released Friday by the U.S. Bureau of Labor Statistics.
The labor and equipment shortfalls are creating weeks of logistics-related delays, Mr. Spilman said. “But the real question is when do we get these backlogs down to a ‘normal’ level,” He added further, “I’m pretty confident we can do that on the manufacturing side. On the logistics side, I’m less confident. There’s not an obvious solution.”