This post is a continuation of information sharing on impacts that we are having as a retailer. Earlier posts in the series are Shipping Impacts during COVID-19 era from August 2020 and COVID-19, Shipping Impacts and Tariffs from April 2020. Please read them for additional context.
Chip and component shortages – One can’t start manufacturing runs until all of the components are available and the costs for components are going up. This becomes a two part issue. 1. Not being able to have stable inventory on some items and understanding when manufacturing can start for general timelines. 2. Increased costs.
Speaking to item 1, for those products being impacted, smaller batch runs are being made when possible and/or alternative designs using chips available are being made. Putting orders in the queue keeps your place in line and will be fulfilled in order. Sadly, I don’t have a way to provide a time estimate though.
As to item 2, similar to how we tried to shield customers with tariff costs we shielded off the first wave seen in price increases during this year, but components continue go up so in order to keep this business going, we will need to increase some product prices soon.
Electricity Shortages – This doesn’t impact us as much but factories in China are being forced to shut down for 1-2 days because of electricity shortages. So even if manufacturing can start, the factories aren’t able to operate at traditional capacity which then causes further time delays.
Inbound Shipping Carriers – Shipments into the USA has been troublesome. Container shipping costs have skyrocketed about 3-4x from a few years ago. Even after paying the added costs, the time to obtain goods is taking longer too as there is a backlog at the ports. Last month there were 60+ ships waiting at the LA port to offload goods, as of today writing there are over 160 ships waiting!
Typically we use air carriers instead of cargo ships as thankfully electronics are small. But occasionally we’ve had things in containers so this easily adds to the time delays.
Outbound Shipping Carriers – USPS, UPS, DHL all seem to be getting better and shipping times. Still not pre-covid delivery times but not the 2 week+ that we saw last year when it seemed like every carrier was in the overwhelmed state. As a negative side effect to getting shipments quicker, we’ve noticed that tracking information is not updated as often or at all. In the past I saw only a small amount of parcels show up to a customer before tracking information even shows up online. Now it seems like this happens for 1 out of 4 or 5 customers as our inquiries of package emails have increased. There isn’t anything for us to do here. If you got a shipping notification from us trust that we handed the shipment off to the carrier and it is in route. Please be patient and understanding that the tracking information isn’t as frequently updated vs pre-covid times.
I hope this information has been useful. We continue to stay open and here to support the community. Happy hacking. Cheers.