Current State of Textile Supply Challenges

Without the proper supply of textiles, laundry and linen services—and their customers—can’t function as well as they should.

And effects related to the pandemic have caused severe challenges when it comes to textile supply.

“The textile supply chain has never been so disrupted in recent memory,” says Alex Heiman, healthcare business unit leader of Standard Textile in Cincinnati.

“Even in the cotton crisis a decade ago, only one factor in the supply chain (raw materials) presented challenges. Now, every aspect, from raw material to manufacturing labor to freight to tariffs to distribution labor, are presenting novel challenges.”

CURRENT STATE OF TEXTILE SUPPLY
Bob Pestrak, director of linen rental for 1Concier headquartered in Miami, says that during the pandemic, the entire supply chain shut down and inventories were at a high level because the virus hit just before peak 2020 season.

“Manufacturers/distributors could not forecast when business would come back or how fast,” he points out. “Laundries started ordering at a rapid pace in the second and third quarters of 2021, and a demand shock was sent into the supply chain.”

Pestrak goes on to say that textile demand still outstrips supply, and there are shortages of basic items that were always in stock. Also, textile and shipping costs are up significantly.

“Since there are so many delays because of container shortages, capacity at the ports and domestic transportation, it’s difficult to provide reliable delivery information,” he says. “Efficiency is becoming more difficult, so we are having to be more resilient and adjust to continual change.”

Laura Lewis, business development manager, sales and marketing, for Boca Terry in Deerfield Beach, Florida, says that manufacturing is ongoing for Boca Terry in robe production, which is helping the company maintain inventory.

“The largest issues we have are with shipping,” she shares. “Usually by the time shipments arrive to the warehouse they are pre-sold.”  

Lenore Law, owner of California Textiles in Corona, California, points out that, simply put, the current state of textile supply is some companies have goods and others do not.

“After COVID-19 and right when we reopened, hoarding started by a number of companies on certain products,” she points out. “The mills were behind overseas due to COVID in the factories, so most companies, as well as my own, kept supplies or product for their existing customer base.”

Law says the cost of goods, especially high-end hotel towels and sheets, have increased in price around 18% to 20%, and items made in the United States are behind in production and taking longer to make.

“My educated guess is it will all come out in the wash sometime next year,” she predicts. “Everyone is hoping by next summer. I’m hoping by April 2022.”
MILLS, CARGO SHIPS, TRUCKS

Three factors are contributing to the current, challenging state of textile supply: mill operations, cargo ship/port issues and over-the-road trucking slowdowns.

Joe Haughey, senior vice president of sales for Star Linen USA in Moorestown, New Jersey, says that mill shutdowns during COVID severely impacted production, and significant raw material costs are now taking hold causing issues for suppliers.

Steve Gasner, vice president of commercial laundry sales for A1 American based in Pacoima, California, shares that mills have shifted production and scheduling to high-end, profitable goods, especially retail.

“It is taking up capacity and less room, more cost, for core or value product lines,” he says. “Recently, staffing has been a huge issue, as it is a challenge with the commercial laundry space. Low vaccine rates are a concern and big issue for mill staffing and production.”

Pestrak says global mills are back in production and, for the most part, they are meeting their promised delivery dates, but price increases are occurring frequently.

When it comes to cargo ships and container shipping, Gasner says rates are at all-time highs.

“Turnaround times have slowed with the Delta-variant COVID-19,” he points out. “Throw in a few typhoons and rates are extreme.

“Shipping firms are prioritizing service on the most lucrative routes. Bottom line: more expense and containers might not be able to ship to the most ideal port.”

Steve Kallenbach, director of market solutions for American Dawn Inc., headquartered in Los Angeles, says that millions of containers are in the wrong place in the world due to national port lockdowns, the Suez blockage and recovery reroutes.

“Additionally, bottlenecks in U.S. ports are causing delays in rerouting empty containers, due to shortages of tractors and container platform trailers in U.S. ports (due to surge), a shortage of 120,000-plus U.S. truck drivers (due to both surge and the state of U.S. trucking labor), prioritization of incoming perishable goods vs. non-perishable goods (textiles),” he points out.

Kallenbach says the cost of container ocean freight has surged from $2,000/avg/container to more than $12,000 and in some cases surged to $22,000-plus.

“Ocean freight cost increases will likely not subside until the second quarter of 2022 or beyond,” he says.

“The shipping vessel industry, no matter what country they are headquartered in, has definitely taken a very greedy approach to this entire pandemic,” Law says. “They choose to haul vessels from China for $20,000 a container versus Pakistan for $6000 to $9,000 a container.”

She points out that the backlog at some of the largest ports was because the country opened back up too quickly, but everyone was eager to get back to business so that could not be helped.

“Then we were all hit with the horrible greed and hoarding,” Law says. “I personally called my congressional leader and I’m asking everyone to do the same and please get Congress involved as it is causing world monopolies and it is not right.”

“It would appear that they are exploiting the situation and dramatically increasing costs to help offset lost revenue during COVID,” agrees Haughey.

Finally, Gasner says that the trucking goods industry remains tight, especially with a diminishing driver pool, truck drivers retiring and new drivers entering the industry remaining low.

“Price hikes show no signs of slowing with high demand and low capacity,” he points out.

“Many delays due to short staffing and other port issues, along with surcharges, are adversely impacting already thin profit margins,” Haughey adds.

“U.S. freight carriers are also at capacity due to recovery surge, as well as the impact of online retail shipments due to a mobile business infrastructure,” says Kallenbach.

“U.S. freight carrier rates have also surged over 30%, and expected to remain high through most of 2022, based on both demand and a driver labor shortage.

“Key U.S. port labor (namely Los Angeles/Long Beach) are showing rumbles of a strike, due to perceived overworking, based on both surge and the incoming Christmas season goods, which were ordered early due to COVID recovery.

“This holiday season will be very challenging for U.S. businesses, based on supply over demand, and this will also impact textile laundries, resellers, co-ops and OPLs.”

For trucking companies, Law points out that fuel prices have increased and also notes the lack of drivers.

“Additionally, a few trucking companies that interlined for other carriers actually closed their doors during COVID in December 2020,” she says. “Personally, we have not had any trucking company problems, except one, as we use a number of smaller companies and a few medium companies for long haul.

“I would recommend requesting that your truckers, whether a direct trucker or you use a broker, that you request no rail unless it is for a container or a very large load.

“I did put a ban on one broker and trucker that chose to go rail without telling us. Years ago, our industry traded trucker information, and I think we should do that again. Having FAK (freight all kinds) rates in place helps a lot.”

Pestrak says that bookings for deliveries are difficult to get with ocean freight carriers, and due to labor shortages, ships cannot get into ports and truck lines cannot hire enough drivers to provide consistent and timely deliveries. Overall lead times are much longer.

“We believe this situation will continue into 2022, so we are planning ahead and increasing our order positions with mills beyond what normal sales history would tell us,” shares Pestrak. “We should see some improvement in stock levels in the fourth quarter and definitely by first quarter 2022, as business usually softens then giving us an opportunity to catch up.”