Disruptions in the Global Supply Chain and How that Affects Promotional Product Orders

New Coronavirus Outbreak in China 

Over one year into the coronavirus pandemic and we started to see things getting back to normal in many parts of the world. At least we started to. But then an out break from the southern region of China led to more problems at the ports and possible product price increases. 

The global supply chain continues to be impacted by the Covid outbreak causing prolonged replenishment times, decreased freight capacity, and product price increase across a variety of categories.  The decreased freight capacity is one of the biggest setbacks we have yet to see.  To expand, a normal container coming from China going to the East Coast would usually cost $3,000 dollars. Now, that same shipment would cost $9,000 dollars. 

Even at this heightened price, there is no guarantee of regular, on time, sailing dates. Therefore, suppliers are being forced to use premium freight which is an increase of at least 35%. 

Then to make matters worse, deadly floods in China and Germany have further ruptured global supply lines that had yet to recover from the first wave of the pandemic, compromising trillions of dollars of economic activity that rely on them.

None of this is good news and may result in additional shipping delays and price increases for promotional products. However, by ordering early and with my guidance on which promotional products can still be obtained to meet your budget and timing, we can help you with your marketing and branding needs. 

Behind The Scenes of China's Product Price Increase

There are serious concerns about the Delta variant of the coronavirus, first seen in India, that have led to major shutdowns in the province of Guangdong. The Delta variant has devastated parts of Asia and prompted many nations to cut off land access for sailors.

Yahoo!Finance reports that not only are there shutdowns in Guangdong, "but some ships have had to wait up to two weeks to take on cargo at Yantian, causing the price of shipping to soar more than 60% since the start of the year."

Raw material costs, transportation rates, and global exchange rates are just a few of the factors that are causing increases across the board. These conditions are what's driving up the cost of commodities like crude oil, lumber, and paper and plastic commodities. Due to the shortage of shipping containers, lockdown restrictions, and decreasing manpower, shipping goods by ocean has cost 4x normal than regular rates.

What Does This Mean for You?

As our valued client we want you to know what that means for you. As of now, the increased cost of the items remains to be unknown but the type of products that will be increasing range from apparel to all other paper and plastic goods. Some prices increased July 1st, while others are set to increase in September.  

If you are thinking of placing orders for promotional products for the Holiday Season or Q4 in general, we would suggest getting those orders in very soon to make sure the items arrive in time and to potentially avoid new price increases in September.

We understand the inconvenience this may cause and are diligently working to bring you the most updated information of cost as soon as it becomes available.  While prices remain uncertain, we are continuously working to help you with all your promotional needs and are available should you have any further questions.  

Contact me today at 847-398-5500 or dona.blunt@newportpros.com for more information.