HFA GRAT examines supply chain disruptions

Overhead view of cargo container ship at night

The HFA Government Relations Action Team (GRAT) recently hosted Federal Maritime Commissioner Rebecca Dye during its regular meeting. Commissioner Dye is currently serving her fourth term and has been a Commissioner since 2002. She is leading the Federal Maritime Commission (FMC) effort, Fact-Finding 29, as they examine the supply chain disruptions related to COVID-19.

Commissioner Dye recounted previous FMC investigations and other ‘surges’ in ocean freight, especially in 2009-2010 when the economy went into a deep recession and the supply chain stalled as the recovery began. While those issues were resolved in a defined period, the primary challenge in the COVID-19 supply chain recovery is multiple layers of issues, compounding to create a much longer disruption than we expected. For instance, many furniture manufacturers had production interrupted following the deep freeze in Texas, which caused chemical plants to go offline. Those plants produced a chemical critical to foam production. These types of unplanned events further impact existing supply chain delays.

HFA members outlined the reality of furniture retailers trying to fulfill customer orders. Equally frustrating is goods waiting on ships just offshore as the backlog to get into the Ports of Los Angeles and Long Beach stretches further. Those two ports, the busiest in the U.S., are the primary source of the backup as Commissioner Dye noted that East Coast ports are not experiencing the same levels of delay. Furniture retailers, both large and small, are trying various mitigation strategies, but their impact has been limited in this situation. Container prices have increased 300-400%, in some cases, and even that dramatic change in price does not guarantee that the goods will reach the retailer any quicker. We also described the link to the domestic manufacturing delays; imported finished goods are delayed, as are imported components needed for furniture made in America. The lack of components has delayed domestic producers for months.

As part of the FMC investigation, industry panels have been formed to look at different aspects of the problem. HFA offered both association and company representatives to serve and share their insights on these panels. We look forward to working with all stakeholders to address the growing supply chain disruptions. The furniture industry’s comeback has been a leading indicator for the broader U.S. economy, and our efforts related to federal and state policies seek to ensure that momentum continues.

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