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AmericanLeather factory worker

More than you ever wanted to know about the reasons for furniture delays.

If you’ve been shopping for furniture lately, or if you’ve ordered furniture or ANY household product for that matter, chances are that you’ve experienced delays, lack of inventory, price increases, or the inability to get what you want as quickly as you’d like.

Multiple forces collided in the past year that made anything home-related hard to get AND more expensive! Appliances, lumber, landscaping materials, and… furniture. First it was the stay-at-home orders which had all of us examining our surroundings a little more carefully. Then, because of the travel bans and restaurant and entertainment venue closures, we stopped spending our extra money on trips, vacations, eating out, movies, and concerts. So… we bought items for our homes! And we bought. And we bought some more. All of a sudden, these furniture manufacturers who weren’t sure if they’d even stay in business in 2020 found themselves inundated with orders. And that’s when the delays began…

Nearly 14 months after the stay-at-home orders were first issued, we see little let up in demand for furniture products, and little improvement in lead times, so we thought we would try to update everyone all at once with the reasons for the delays…

  • Covid caused most factories around the world to close for many, many weeks. Starting in Asia, then Europe, then Canada and the US, one by one we got word that our vendors had to close their facilities out of concern for their workers’ safety. Each government had different mandates and each permitted factories to reopen at different times. In the US, North Carolina companies were able to reopen sooner than our friends in Texas, for instance. To the north, our Canadian suppliers were closed the longest – as long as 12 weeks for some of them.
  • When vendors reopened their factories, they had two immediate issues: (1) creating a Covid-safe environment with lots of sanitizing, PPE, and 6-feet between workers and (2) getting workers to return to work. Between employees’ kids out of school, expanded unemployment benefits, and general fear about working around other people, many factory workers couldn’t or wouldn’t return to work. Unlike many fields which were able to shift their employees to work from home, that doesn’t work when you’re building a dresser or upholstering a chair. Suppliers offered referral bonuses, pay increases, and more to get new employees with the experience they needed. And that contributed to price increases.
  • Supply chain issues were also a problem. Even items that are ‘made in the USA’ often have imported parts: recliner mechanisms, chrome bases, door or drawer handles, and, of course, lots and lots of fabrics. Getting these parts flowing again was incredibly difficult as Asian and European factories were also working below 100%. And, sadly, some parts and fabric suppliers simply closed their doors and never reopened. Sunbrella, one of the most popular suppliers of indoor/outdoor performance fabric, closed their Pennsylvania factory in the middle of what had suddenly become a busier than expected outdoor furniture season.
  • Then came Memorial Weekend 2020, then June, July, August, and a WHOPPING busy September during which time Americans shopped, and shopped, and shopped. One LaDIFF domestic supplier returned to work after the three-day Labor Day weekend to 4x the orders they usually had after a holiday… and they were already behind going into the weekend.

So, we have fewer workers, fewer and hard-to-get supplies, and more orders… that’s enough of a recipe for delays in and of itself. But wait… there’s more…

  • Freight companies could not handle the volume of orders they were asked to carry from vendors to retailers. They would pull up to a vendor with half a truck empty, and the vendor would have a full truck’s worth of goods for them to take, which just doesn’t work. And coming back the week later, the orders would simply have multiplied. So shipments that used to take 7-10 days to travel were now taking 2 weeks, 3 weeks, even as many as 4 weeks, just to get from the High Point, NC, area to Richmond, VA. A freight carrier works like an airline. The plane doesn’t sell you a ticket and take you when you want to go; you buy a ticket for when the plane is scheduled to travel, so many travel at once. Similarly, a freight truck has to gather a full truckload of goods, plan their stops to each retailer, and deliver accordingly. And, of course, they had workers out sick or not returning because of Covid too.
  • Freight part 2 – overseas shipments were becoming increasingly congested. Because of a serious trade imbalance, where the US was importing more than we were exporting, there were waiting lists to get a container (that’s one of those 40-foot long metal boxes you see pulled by semis). And once you did reserve a container, you then had to reserve space on a container ship. All of this competition for containers not only caused delays, but drove shipping prices higher by as much as 400%. Yes, you read that correctly. Instead of paying $2500-3500 to get a container shipped from Asia to the USA, it was costing some shippers as much as $12000 to ship a box of goods, whether the container was filled with flat-screen TVs or diapers, the cost to ship it was going up… which contributed to price increases.
  • Freight part 3 – when those shipments arrived at the port, there just wasn’t enough manpower to keep them moving through the import process fast enough. National news outlets reported on the ‘chaos’ at the port of Los Angeles with hundreds of container ships waiting to dock. There simply weren’t enough dockworkers OR space to unload them all. On the east coast, a container from Europe might get unloaded into the shipyard, but then had to wait a few more weeks for customs to clear the entry or to find a driver to pick up and deliver to the end destination. More delays…

Now we have short-staffed suppliers with LOTS of orders who cannot get all the supplies they need and have to pay more to get them shipped – all contributing to delays AND price increases.

  • With price increases rolling in daily, we set up a spreadsheet just to monitor all of them. Increased demand was putting pressure on any materials used by any supplier in home-related industries. Steel needed for beams and girders is also needed to build dining tables. Lumber used as wall studs is also needed for sofa frames. Competition between industries simply drove prices higher in all categories.
  • Then… in February and March, two completely unrelated events happened that – during a ‘normal’ year – would have caused a temporary setback, but this was no ordinary year. First: February – the freeze in Texas. Any supplier producing in Texas found themselves closed again, for the second time in 10 months, because they had no electricity and no water. But the problems weren’t limited to Texas. Images came from the gulf area of the interior of a Dow polyol plants completely frozen, with icicles hanging from the ceiling. Polyol plants produce the materials needed to make, amongst other items, FOAM… as in foam for mattresses, upholstered seating, car seats, etc. And polyols are also used in production for many of today’s super popular performance fabrics – like Sunbrella, Crypton, and others. Carpenter Foam, based here in Richmond, sent Force Majeure letters out to the manufacturers who used their products, who depended on their products to make their furniture. The Force Majeure meant that they could not be held financially responsible for this ‘Act of God’ crisis in Texas that ruined foam supplies for several weeks. Many of our suppliers are still catching up on the loss 2 months later.
  • Next, in March, a SUPER-SIZED container ship got stuck in the Suez Canal thanks to a bad sandstorm. This didn’t cause a delay for the contents of just that ship (over 20,000 containers), but for thousands of container ships that couldn’t pass through the canal until the ship was freed. Those boats were headed to ports in the Mediterranean and in Europe, where the containers would be unloaded, then reused to ship European goods around the world – including to the US. So until a container could be unloaded from one of those ‘Suez-stuck’ ships, the goods would sit at suppliers’ warehouses… more delays… and more demand for containers… meant more price increases.
Super Sized Cargo ship courtesy of CNN

And where does that leave us?

In the last 12 months, LaDIFF has received over 50 unplanned price increases, some of them even applied retroactively (yes really), and some vendors sending 3 within an 8-month period. That’s a lot of adjusting.

This report doesn’t begin to cover everything. Our Canadian friends haven’t been able to leave their country to visit their customers in the US. Almost all sales training and product shopping has been done virtually, which is hard to do when you need to touch and feel the product. And then, of course, there have been the new Covid strains that have hit some areas of the world more than once, causing additional closures.

Unfortunately, from our suppliers, we’ve heard reports of 30% increases in lumber costs, 350% increases in overseas freight costs, and a variety of new general expenses to meet Covid safety protocols in their factories. They are trying to catch up and communicate with us regularly, but often they cannot know that a part will be delayed until it doesn’t ship on time. While they try to catch up, new orders keep pouring in! Outdoor furniture suppliers are reporting a record spring season receiving 4-6 times the orders they normally get in a whole year. Upholstery manufacturers who just 18 months ago were producing and shipping in 6-8 weeks are now telling us to quote 6 months, and that’s only if there is no issue with the fabric or parts. And with multiple suppliers tapping into similar resources and competing with other industries, there is no simple organizational solution except… for PATIENCE.

And that is what we ask from you. Patience.

So many of you have been incredibly kind and understanding when it comes to our unknown answer to the question ‘when will it be here?’ We know you’re anxious. So are we! And trust us when we say that we hate giving bad news, especially more than once during an order process. Also trust us when we say that we are communicating with our suppliers every day to get the most current answers we can.

We appreciate your trust in us when you make a purchase or place an order, and we love your desire to have a beautiful home filled with LaDIFF. Our goal is to make that happen for you as quickly as possible.

Thank you.

LaDIFF-Showroom

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