Using Flame Retardant Fabrics
November 22, 2021All About Embroidery
February 15, 2022Much changed during 2021 in the custom window business as compared to "the year that wasn't" in 2020. Then again, much didn't.
I distinctly remember leaving the Carole facility at the end of last December and saying to myself, "Well, at least 2020 is in the rearview mirror." Our industry — and nation, for that matter — breathed a sigh of relief, believing that the turn of the calendar year would bring with it a gradual track toward "normalcy." After all, vaccines were starting to trickle out, and while backorders and lead times were on the rise, they had not reached the extraordinary levels we are experiencing today. It was hard to imagine that 2021 would test us even more than 2020, first with the winter Covid spike, then the Delta variant, interlaced with severe labor shortages, supply scarcity, and disrupted supply chains.
By now, you have undoubtedly felt the consequences of all of these issues in your projects, whether in the form of tremendous lead times or ongoing increases in costs. Let's look at the causes behind them and see what we expect as we look into 2022:
Severe Labor Shortages
In addition to just needing people to meet additional demand, other social issues — like the disappearance of child care facilities over the past year and the caring for elderly parents who are more immobile due to Covid fear — have caused many to leave the workforce, especially women. Our cut‑and‑sew industry is dominated by skilled women, so their absence is particularly hard felt. In a custom industry like ours that is more dependent on artisanship than automation, the shortage of talented labor will strain us for some time to come.
However, technology is available to help employees create better products more consistently even with custom items, and these investments will become more essential to help new employees create high quality products right out of the gate.
Derailed Supply Chain
In the blog post that I wrote a year ago, I quoted estimates that it might be Q1 of 2021 before supply chains and lead times were normal again. Now it appears the issues may drag into mid-2022 and beyond. How did we get it so wrong? Largely it has come from continued strong consumer demand that has not given the very sophisticated global logistics network a chance to reset from the demand and supply shocks that were encountered in 2020.
Indications are that since the rush to deliver goods for the 2021 holidays is now complete, ocean shipments will begin to taper back somewhat. Nonetheless, we are a long way from that translating into faster fulfillment times for your customer's sofa order. Global supply chains have become so fine-tuned to increase efficiency and reduce costs that minor bumps in the road create major traffic jams. With the unprecedented challenges of the last year, instead of traffic jams we have miles-long pileups that will take some time to clear.
Escalated Costs
In early 2021, who could have foreseen that the cost to ship a container from Europe would jump from $1,500 to over $20,000? Who would have expected fabric mill costs to increase anywhere from 10 to 30 percent? These costs are a factor of the labor and logistics issues already discussed.
Over time, some things like shipping costs will begin to recede as the market economy starts to equalize supply and demand. Other costs are here to stay, though at a new level of relativity — the same way a gallon of gasoline costs about the same in relative terms today as it did 40 years ago. Inflation hurts everyone on the way up, but high-end luxury goods tend to bear less of the impact than commodities. Hopefully, this will bode well for the custom window category in 2022.
2022 Silver Linings
Even with all of these challenges influencing the state of our industry, there are some silver linings:
- With work‑from‑home expanding as well as the desire to spend more home time with family and friends, remodeling and DIY should benefit.
- The strong economy and the backlog of demand for homes, both new and existing, will create substantial opportunity when construction begins to pick up pace again.
- Customer expectations for lead times has been reset, meaning oftentimes people have become more understanding when they cannot get their custom products ordered and installed in a matter of days.
- And finally, manufacturers of all types have learned valuable lessons over the last two years in regards to contingency planning. Will substantial decorative fabric production shift to U.S. shores as a result? Doubtful, at least for the long term. But you can expect that more inventory will be stocked throughout the system to ensure future economic ripples do not leave designers and jobbers without product to sell.
Indeed, 2021 was a mixed bag of ups and downs, but the industry has been blessed with strong demand and the expectation that this will position us all for success in 2022 and beyond. We at Carole wish you a prosperous new year and look forward to serving you in any way possible.
Frank Andrew
President, Carole Fabrics