Supply Chain Issues Still Affecting Printing and Customization Industry

As we make our way through the middle of the second quarter of 2022, two years after the beginning of the COVID-19 pandemic, businesses in the custom graphics, printing, and customization industries are still dealing with supply chain issues and port congestion.

Port congestion remains high

As stated in MarketWatch, Michael Tran and Jack Evans at RBC Capital Markets report that one-fifth of the global container fleet is currently stuck in congestion at various ports, and less than 40% of ships are arriving on time. Meanwhile, freight prices are still elevated, while marine fuel prices and insurance costs are soaring.

According to Tran and Evans, last year’s supply-chain woes were primarily a function of record consumer demand for goods. This year’s 2.0 version is exacerbated by China’s battle with COVID-19 and Russia’s war on Ukraine.

“We’ll be feeling the effects of the lockdowns in China for months, along with the backup at ports, container shortages, and lack of drivers. I don’t anticipate much change for the rest of the year,” states Cathy Klein, controller at Crystal D Awards.

Prices rise and supply chain strains continue

The pandemic brought a significant increase in shipping and container costs, but as reported by Investment Monitor, experts are divided on whether this will continue throughout 2022.

While it remains to be seen how long prices will stay high, the highly reported labor shortage, particularly of truck drivers, is a problem affecting not just shipping but the entire supply chain.

“Disruptions in the supply chains of almost all companies has forced domestic and global strategies to remain flexible. Longer lead times, container shortages, and increased fuel costs have raised prices of most goods and have impacted their availability,” explains David Perfect, supply chain manager at Crystal D Awards.

According to Investment Monitor, “It is impossible to know how the various strategies concerning supply chains will play out across the year; however, it is clear that a failure to react to the ongoing disruptions will not be enough for companies and supply chains to survive.”

Andrew Oransky, Roland DGA president and CEO, says the company’s customers and printer users have been forced to seek “alternate materials to avoid production interruptions.

He continues, “We’ve found that in many cases, users are making both equipment and supply choices based on what’s immediately available and adapting their processes accordingly.”

Managing inventory and pricing issues going forward

Investment Monitor emphasizes that these concepts have never been so widely spoken about before and says companies seem to have a renewed respect for the importance of supply chain strategy. Our industry experts offer some advice for graphics shops next quarter:

“The earlier you can plan, the more control you have over both inventory and pricing,” says Perfect. “This gives all partners in the supply chain time to plan and react to changes in the most beneficial way. Transparency helps by aligning goals and objectives.”

Lance Heap, VP of EXILE Technologies, advises to expect — and specifically plan for — continued price increases saying, “Costs for components are on the rise. It will impact everything.”

“Flexibility is a key factor,” adds Oransky.” Materials are the lifeblood of any printing business, so make sure you have something to print on. That means having a second, third, and even fourth choice of substrate in mind for every type of job. When you can get the paper, vinyl, and other materials you need, stock up.”

Oransky also advises forecasting any capacity needs. “If you think you will need additional equipment, work with suppliers to get in line early as lead times are much longer than usual. Additionally, rising interest rates could mean that financing will be more expensive in the future.”

Want to share your experience with supply shortages and delays? Reach out to me at mfennema@nbm.com.