For Clover Toys in Ballard, life at the sharp end of the global supply chain is getting complicated.
Business is booming, in part as locals, fearful of missing out due to supply chain problems, are doing their holiday shopping early, says owner Brittney Geleynse.
But those same supply chain problems also mean Geleynse hasn’t received some of her biggest sellers for the holiday season, which typically accounts for 25% of her annual profit.
Only a few of the popular plush hand-puppets from Indonesia have come in. The hand-carved figurines from Germany are missing. And because cargo rates from Asia have jumped as much as 1,000% since the pandemic began, Geleynse’s Tonka toys are still “sitting on a dock in China because it would cost more than the value of the toys being sold to ship it,” she says.
Geleynse has found alternatives — her shelves are full, unlike many retailers this season — and some of the hundreds of back-ordered products may still arrive. But after months of delays, incomplete shipments and apologetic emails from suppliers, Geleynse knows she “can’t even promise what will be here … let alone when.”
Nearly two years after COVID-19 upended global trade, businesses and consumers in the Seattle area are still suffering from a maxed-out global supply chain that can’t catch up.
There are “out of stock” signs at grocery stores, empty shelves at department store cosmetic counters. Car dealers are short on new cars and restaurants must perform weekly sourcing gymnastics to preserve their menus.
“In the past, we never had to monitor key ingredients this closely,” says Bob Donegan, president of Ivar’s Seafood, which recently had to arrange for a special shipment of breading mix after a supplier couldn’t get it in.
“Anything imported is hit or miss,” echoes Todd Biesold, co-owner of Merlino Foods, a Seattle-area food service distributor that has struggled with outages of basic ingredients like shredded mozzarella, olive oil, pizza flour and balsamic vinegar — and even cardboard pizza boxes.

Many Seattle-area businesses have come up with supply chain hacks and workarounds. Seattle-based ebike maker Rad Power Bikes, for example, went so far as to charter freighters and buy its own cargo containers to avoid what would have been months-long delays on components from Asia and Europe. “We were seeing constraints at every node in the supply chain,” says Mike McBreen, chief operating officer.
With constraints expected to last well into the new year, many shoppers are trying to get ahead of empty shelves, especially in categories such as toys, cosmetics and electronics.
“On the news, it says what’s on the shelves is going to be it,” says Edmonds resident Claudette Hennemann, who was at Alderwood mall last week and is shopping earlier than usual this year. “It’s going to be a very interesting Christmas.
Lean, mean … and vulnerable
For decades, manufacturers, shippers and others in the global supply chain worked to make the system fast and efficient. Many products were manufactured and shipped “just in time,” which reduced the need for large and expensive inventories and excess storage and hauling capacity.
That lean structure cut shipping costs dramatically — but it was also hugely vulnerable to a global shock.
When COVID-19 shuttered factories in Asia and elsewhere for several months in early 2020, it depleted inventories and created huge backlogs of unfilled orders. The imbalance only got worse as U. S. consumer spending shifted from in-person services, such as restaurants, to consumer goods, such as electronics, both as e-commerce and in stores.

Orders for microchips, for example, now take around 22 weeks to fulfill, up from nine pre-COVID, according to Susquehanna Financial Group, and that has contributed to out-of-stocks in gaming consoles, cameras and computers. Inventory is down for “anything with a processor,” said an employee at a Seattle-area Best Buy, who asked not to be named because of company policy.
Scarce chips are also a big reason automakers can’t meet demand for new cars. At Gilchrist Chevrolet Buick GMC in Tacoma, new inventory has hovered between 40 and 50 vehicles, compared to around 250 before the pandemic, says Mitch Tramm, director of parts and service.
Gilchrist has compensated by bulking up its used inventory, Tramm says. But because used vehicles typically need maintenance, the dealership has had to cope with shortages of spare parts in everything from emissions sensors (which require processing chips) to idler pulleys, windshields and even oil filters, Tramm says. “We’ve got some warranty repairs in the shop we haven’t been able to complete for, I would say, three months or longer,” Tramm says.
Product shortages are only the beginning.
Even as global production has steadily recovered, the output is hitting another bottleneck: The lean “just in time” global shipping system lacks enough spare capacity to clear the backlogs while also feeding new demand. And, as with most pandemic-related problems, those capacity deficits — in vessels, cargo containers, warehouses, truck trailers and other physical infrastructure — are compounded by a shortage of workers at nearly every point in the chain.
Lack of capacity has sent shipping costs soaring. Since the start of the pandemic, the cost to get a truckload of fresh produce from Southern California to Seattle has roughly doubled to as much as $7,000, says Brian Bernard at FC Bloxom, a Seattle-based importer, exporter and distributor.
Some international rates have jumped even more, especially on the spot market used by smaller companies. “We saw container moves from Asia to the U.S. rise from $1,800 to $18,000 in a 12-month period,” says Rad Power Bikes’ McBreen.
Those higher global and domestic shipping costs are fueling inflation in everything from food to construction materials to fuel. “Our diesel costs were up around 70% over two years ago,” says Merlino’s Biesold.
Ivar’s is paying 23% more for potatoes and 48% more for cooking oil, Donegan says.
Rising shipping costs are also squeezing margins for retailers, who are often loathe to pass on cost increases to consumers, especially during the holidays. “I have chosen to just eat it,” says Geleynse of the 5%-15% shipping surcharges she’s now being asked to pay.
Domino effect
The bigger cost, however, is in time.
Monthly container imports into the ports of Seattle and Tacoma in 2021 are actually slightly ahead of where they were in 2019, according to September data from the Northwest Seaport Alliance (NSA), which oversees marine cargo operations at both ports. Both ports are running at nearly 100% capacity, up from 70%-75% in normal times. “It’s just been full on since late spring, early summer,” says alliance CEO John Wolfe.
But many of those containers are late, thanks in part to earlier backups and bottlenecks at other ports, including in California and Canada, where many Puget Sound-bound ships stop first: the average transit time from Asia to West Coast ports has risen from 44 days in February 2020 to 73 in September, according to Freightos.
Worse, there’s no place to put all those containers. Seattle-area warehouses are now at around 98% capacity, up from 92% before the pandemic, which has slowed the pace at which containers can leave the port, says Jim Contreras, transportation manager at Whiplash, a trucking and warehousing company in Sumner.
Thanks in part to pandemic-related labor shortages, many warehouses can’t quickly unload incoming freight and get it back out the door to customers, Contreras says. Another factor: Cargo volumes have been so high lately, as retailers race to restock, that the warehouses haven’t had the usual seasonal ebbs to get caught up, Contreras says.
Those warehouse bottlenecks, in turn, mean containers offloaded from ships are now sitting longer on a truck trailer, or “chassis” — often at warehouse parking lots and other temporary spaces — before being unloaded and returned to the port.
And because imports have been running ahead of exports, ports are so overloaded with empty containers that returning truckers face long waits to drop off empties so they can pick up another full one. “Yesterday, it took three hours to return one empty to the terminal” in Seattle, says Lisa Clark, an independent trucker.
As container turnaround times have ballooned, the outflow of cargo from the ports has slowed further. Meanwhile, the very fullness of the port terminals makes it harder to offload ships, says Wolfe. As of Friday, nine vessels were waiting offshore for a berth at Seattle or Tacoma, up from zero before the pandemic, Wolfe says.
Those bottlenecks won’t be solved by running ports 24 hours a day, as some politicians have suggested.
“It’s not a matter of the terminals running 24-hour operations,” says Eric Wright, vice president of the Washington Trucking Associations. “If you don’t have chassis and the warehouses aren’t open, it doesn’t matter.
“The entire system has to get back in sync,” Wright says.
Getting by … for now
In the meantime, many retailers are coming up with ways to get around supply chain constraints.
Rad Power Bike’s decision to buy containers and charter freighters, five of them, which were brought into the Port of Everett, raised the company’s “door to door” shipping costs by 35% over pre-COVID shipping rates, McBreen says. But without the charters, Rad Power’s 2021 projected sales would have been 18%-20% lower, McBreen says.
Likewise, the decision by Ivar’s to end-run struggling distributors on ingredients — in one instance, setting up a temporary fish warehouse in a rented refrigerator truck — has allowed the chain to avoid all but the briefest outages. “If we hadn’t set up our own backup distribution system, we would have been out of items for days or weeks at a time,” Donegan says.
Other players have leaned hard on finding substitutes for out-of-stock items.
When Merlino Foods’ regular supplier of shredded mozzarella was unable to fill an order, Biesold discovered that the same cheese was being sold by Costco under the Kirkland brand. “So we were ordered as much as we could from Costco online until they figured it out” and started declining orders, Biesold says.
Many retailers also are over-ordering to refill inventories and compensate for uncertainty over future deliveries. “For now, we’ve moved from ‘just in time’ to ‘just in case,’” says Contreras.
But those tactics have downsides. In the race to overbuy, many smaller retailers are already getting elbowed aside by bigger players, which have leverage with suppliers and shippers, experts say.
And all that extra buying will simply prolong the crisis by adding more load to a maxed-out system. Retailers “are importing as fast as they can,” says Contreras. “The problem is, the consumer is buying it even faster than they can restock, so the gap is getting bigger and bigger.”
For some experts, the only real fix will come when consumers reduce buying long enough for the system catch up — something that might happen naturally as rising shipping costs eventually lead to higher consumer prices over the next few years.
But Apurva Jain, an associate professor and supply chain expert at the University of Washington Foster School of Business, thinks that adjustment could come sooner.
The current surge in panic holiday buying, he thinks, might be quickly followed by a pause in consumption. Even in the longer term, consumers may be more willing to adapt to shortages than dire forecasts suggest, Jain says.
“People change their behavior,” he says. “Everybody is trying to be flexible.”
Retailers are counting on it. Geleynse says her adaptations and substitutions have largely been accepted by her customers, who realized she’s dealing with global forces out of her control.
“For the most part, people have been kind and are willing to try something new with us,” Geleynse. “Which is really all I can ask.”
You may also like
-
How Company Ecosystems Can Generate Sustainable Tourism
-
Lawmakers go business enterprise incentive law, critics say it hurts schools
-
Here’s what’s getting cheaper at the grocery store
-
‘Woke capitalism’ or sensible organization?
-
Match Business enterprise Financial commitment Faces Chilly Summer season, But A lot Warmer 2024