Billions of dollars' worth of goods aren't going anywhere right now.
Dozens of ships are languishing in the ports of Los Angeles and Long Beach, California, carrying $26 billion in goods, according to an estimate last week from Chattanooga, Tennessee-based media and analytics company FreightWaves. The Biden administration has implemented initiatives to help, noting that the two ports account for 40 percent of shipping containers that come into the U.S.
The efforts won't be enough, says Anthony Coombs, founder and CEO of Splendies, a subscription-based underwear seller. Because of everything from clogged ports to a shortage of truck drivers to extraordinarily high demand for goods, the supply chain struggle has continually gotten worse. "This is what we call 'the shipping apocalypse,'" Coombs says.
Coombs and Adam Compain, senior vice president of global product marketing at Project44, which helps companies manage supply chains and logistics, spoke at an Inc. 5000 Vision Conference event on October 21 on supply chain woes. Here are three tips they offered for dealing with the crisis.
1. Plan far ahead
Coombs says his biggest regret was not realizing immediately how bad the supply chain crisis was. At first, the company planned an extra month out for getting inventory. Now that it better understands how serious the situation is, he says, "We're not pulling any punches." Splendies plans to be supplied for all of 2022 before the end of this year.
2. Talk to consumers
A difficult aspect of the global supply chain is the data is just not good, which makes life even more challenging for sellers, Compain says. Customers tend to respond best to having access to information, he adds--if sellers can better know and predict when things will arrive, they can plan ahead, figure out the best carriers, and be transparent with customers to maintain goodwill.
Coombs says Splendies's focus has been on communicating with customers, including adding a detailed notice about shipping delays to its website. When a product was delayed by a few weeks in September, the company sent emails, blogged, created videos, and, most important, tried to "set expectations low so [we could] hopefully exceed them." When you tell a customer something is going to be late, and it gets there a little earlier, that is always better than having to communicate two separate delays, he advises.
3. Jump on a boat (or a plane)
If you haven't planned yet for the holiday season or are already behind, only one solution is left to you, says Coombs: to air freight your goods. He estimates that can costs tens of thousands of dollars, which you have to weigh against keeping your customers happy. Recently, someone told Splendies that a shipment scheduled for November wouldn't arrive until late December. So Coombs paid people to drive six hours in China to pull two containers off a ship and air freight the contents. He was able to pull that off, he says, because he's been working with the supplier for several years.
It also can help to go straight to the source of the delay: Coombs says he went to a port and asked about a shipment that had been stuck for about two weeks. He talked to a security guard and offered a year of free underwear if they could get the shipment. "We did get our stuff the next day," he says, but the guard never cashed in the offer.