Your New Couch is Ready, but It Could Take Weeks to Arrive

Date: Tuesday, July 6th, 2021
Source: The Wall Street Journal

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.

Top news and in-depth analysis on the world of logistics, from supply chain to transport and technology.

Typically furniture carriers pick up products from the factory and take them to a consolidation center where the items then are reloaded onto trucks bound for different retailers and regions. Now trailers packed with furniture are stacking up waiting for people to unload them, Mr. Spilman said.

This week, he said, “we ran out of room. There was nowhere to put anything because we had no trailers,” forcing the company to go out and rent more.

Similar strains are reaching across supply chains, with logistics and warehousing providers struggling to hire distribution workers as the U.S. economy heats up on strong consumer and industrial demand.

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.

Bassett has been expanding its network of regional warehouses to speed up delivery to customers. The company added four new sites over the past year and is pushing more of its bestselling inventory closer to big population centers, Mr. Spilman said.

“Of course, this effort has been constrained by our general inability to fully stock the facilities,” he said.

The company expects demand to taper off some over the summer as people spend more on travel and dining out.

“But the real question is when do we get these backlogs down to a ‘normal’ level,” Mr. Spilman said. “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.”


[Read from the original source.]