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Thread: The state of the Woodworking Market.....a supplier perspective.

  1. #1
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    The state of the Woodworking Market.....a supplier perspective.

    Hi All –
    There has been some discussion here, and on other boards, about back-orders, price increases, shipping delays, and other market disruptions. I thought it would be worth sharing some of the information that we share internally with managers and staff.

    Shipping issues:

    • Between port congestion and container shortages, supply networks are reaching a crisis point.
    • Inbound volume to North America has overwhelmed ports, dwell times continue to rise.
    • Hundreds of thousands of containers are sitting in the water off North American Ports waiting to unload.
    • Vessel space back to Asia is being prioritized with full containers, delaying the return of empty containers.
    • Container availability in Asia expected to decline sharply in April, leading to rate surges.
    • Japan has a massive shortage and is no longer accepting any bookings for new shipments until after May.
    • North American sales demand is 109% of available inventories, fueling a continuous re-order process choking out an already strained network.
    • North American rail terminals are experiencing 30%+ increases in volume.
    • Suppliers are warning of longer turnaround times for orders.

    A really good video produced by the WSJ about shipping can be found here..

    https://youtu.be/NgIZbRg1vOc

    Keep in mind too that there are lots of raw material, components, production equipment, and replacement parts trapped in those containers as well. That will have ripple effects too – adding to the overall delay.
    This uncertainty continues to build in our markets.

    You've all seen what's gone on with the price of lumber. Costs are continuing to climb everywhere. Reasonable shipping rates for imported products might run in the range of 2-10% of product cost for most woodworking product. Shipping rates today are more than 4 times what they were one short year ago. That means costs have increased by 8-40% or more on replacement inventory, and those costs will be passed on somehow. (and …. just wait until the various Governments find a way to re-coup pandemic deficit spending….).

    In short – supply will continue to be spotty, there will be substantial cost pressure on what goods are available, and there is still the looming possibility of Government tax increases and user fees.

    All part of the “new normal”.

    Cheers (kinda),

    Rob

  2. #2
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    Good data Rob and a good video. The more we know the better we can tolerate the current normal. We don't have to like it but at least we know WHY and don't have to gnash our teeth as much ;-)
    I always forget . . . Is it the letter "S" or the letter "C" that is silent in the word scent?
    - Glenn (the second "N" is silent) Bradley

  3. #3
    Quote Originally Posted by glenn bradley View Post
    ...and don't have to gnash our teeth as much ;-)
    Glenn, that takes away what little pleasure there is in this situation!!

    Left click my name for homepage link.

  4. #4
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    Thank you Rob for the detailed and pertinent information. My lady friend ordered a new Toyota truck many months ago, but it has been in eternal assembly delay due to a chip shortage. Seems that is a problem for every automaker except Tesla, which apparently makes their own chips. But all is not gloom and doom in my household; I ordered something from Lee Valley last week and it’s on its way!

  5. #5
    Rob,
    I can sympathize. My family is in the Retail greenhouse business. We buy some finished stock but we grow most things ourselves.

    * Two months ago, we didn't know if we were going to be able to buy soil, due to the border closures. Ultimately our supplier found a US source two weeks before we needed it. it is a different mix, but we think we can adapt to it.

    * Had we not got our pots, packs, and flats last year for tax reasons we would not have been able to get any in time due to Texas plastic manufacturers shutting down in the cold snap. I've talked to others in the biz that are still waiting for things they ordered months ago.

    * Seed shortages. Fortunately we ordered most things in January. Right now even things that never sell out are in short supply.

    * Extended lead times. Things that normally take a few days to a week are taking 3-5 times that. Labels, 3 weeks. Seeds were 3-5 weeks a month ago.

    * Cannot supply. Something are just plain not available. I had to search to track down yellow annual daisies from another greenhouse for our best customer, as we were unable to get either cuttings or finished plants from our wholesaler. Since we had to pay full retail for them, we will end up losing about 40 cents per plant. It is still worth it to keep them happy though. We anticipate not receiving our full wholesale order as well.

    So roughly two months ago, we were looking at no seeds to plant in the soil we couldn't buy which would be held in pots we were danged lucky to have at all. At that point it doesn't really matter if demand is up 1% or 1000%. In growing for sale, timing of crops is essential. In a state with a short growing season, tomato seedlings have no value in July.

    Customers are also going to be in for a price shock of probably 10%, in anticipation of the price increases we are going to be facing when we (and everyone else) order all of our supplies in the fall, so we (and everyone else) don't risk getting caught short again. Generally we don't order that far in advance, since things like seeds and soil (specifically the surfactants) are perishable, but that is better than not getting them at all.

    That said, at least we are in an industry allowed to be open and with healthy demand. It is still stressful though

  6. #6
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    As consumers, for our hobbies, a little patience and anticipation isn't so bad for us.
    But I hope that's not at too great a cost for the businesses we're supporting.

    In happy news, LN emailed me that a batch of Tenon saws was available today, so I snagged one.
    Last edited by Nathan Johnson; 04-21-2021 at 7:24 PM.

  7. #7
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    Rob, I own a retail ergonomic furniture store. As you can imagine office/work from home furniture is in high demand and facing the same logistics issues you have pointed out. Several suppliers indicating they cannot even book container space for imports. It’s tough to tell a customer that we cannot guarantee any sort of delivery time. But most at least, are getting used to that.

    In a somewhat unsympathetic way, I have to grin a little that this society used to immediate gratification and next day or same day service, is just going to have to get some patience. Kind of like back in the day when everything not found at retail was ordered through the mail and sent through the mail...weeks at best. Too bad, so sad. While maybe not great for business, might actually be good for everyone to just slow down a little.

  8. #8
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    In my last trip to HD, a KD 2 x4 was $6.50 vs about #3 pre-pandemic. At the hardwood store, 3/4" maple veneered ply was $70 per sheet vs the usual $60. Now tha we can travel again, gasoline is pushing $4/gal.

    It is our children and grandchildren who will pay the price for all the deficit spending.

    During the pandemic, we went no where and bought little. I started using up some of my poplar stash on a bench undercarriage. The only shortage I've experienced was trying to get an 80T 10" plywood blade (not a hand tool, I know.)

    @ Rob Lee Thank you for that post and the link. Most informative. I hope you have some top-notch prognosticators on your staff and that they have paid up the licenses on their crystal balls. May the forecast gods be with you.

  9. #9
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    I'm glad I bought a container when I did. I ordered two platform ladders from a Black Friday sale that Lowes had. Still not shipped.

    I ordered a new welder about a month ago. It was supposed to be here last Friday, but still no ship date.

    Last week, I ordered a 72" zero turn mower. Delivery date supposed to be June 29th-we'll see.

    I'm not complaining. I understand the situation, and have plenty of other stuff to do, and stuff to work with.

    I was glad, and pleasantly surprised to get the two new Veritas honing guides, but I don't know when I'll have the time to try them out.

  10. #10
    Thanks for the update and explanation Rob.
    "All that is necessary for the triumph of evil is that good men do nothing."
    - Sir Edmund Burke

  11. #11
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    This situation kind of reminds me of my youth when we got our Sears or Spiegel catalog, spent a week or two paging thru it; placed an order and waited 6-8 weeks before our new stuff showed up. This situation helps you appreciate how much we took for granted pre-COVID.

  12. #12
    Thank you for the update.

    I’ve got to say, I picked a really bad time to get into hand tool woodworking.

    I've been waiting on Lee Valleys back order for a set of chisels, router plane, shoulder plane and plow since December. Very frustrating. Been waiting on clamps to be shipped too, which are marked as out of stock by Amazon, at least the ones that ship to Israel.

    at least my lumber is acclimating to my house !


    I’m not pretending I’m happy with the situation but I do understand. Hopefully things will get better
    Last edited by Assaf Oppenheimer; 04-22-2021 at 11:35 AM.

  13. #13
    Thanks for sharing the info Rob. I get trade publications here and as you say the problem is widespread at many levels of manufacturing due to supply-chain issues. Just-in-time supply chains probably exacerbate the problem in many industries.
    Last edited by Keith Outten; 04-23-2021 at 1:02 PM. Reason: Removed website link violating TOS

  14. #14
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    Rob Lee is part of the solution. He runs an outstanding company and it needs us to help him pull it through this temporary mess.

    Yesterday I received a push email from Lee Valley featuring their new hummingbird feeder, with free shipping over $30 (yes, you read that right). My wife the birder will love its attractive design. I jumped at the chance to send Lee Valley a little scrap of revenue, and darned if they didn't ship it out the next morning!

    Place orders, people.

  15. #15
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    At one time Great Britain was the ‘workshop of the world’. Now it’s clearly Asia. My British heritage made me used to a steel industry, coal industry, engineering companies and a country that made a lot of stuff. When cheap Chinese stuff arrived it was met with a “Buy British” campaign. Shipping and delivery times were never an issue. Other issues though, the Common Market stopped Britain buying Canadian Lumber with a substantial price rise as a result.

    If seems Asia’s growth stunted Canada’s development of industry.
    So design and manufacture are literally worlds apart; shame.

    Way back when I lived in Ottawa I was very familiar with Lee Valley’s first and only store. Later I drove past their London (ONT) store twice a day, sometimes I was late home. Their latest sharpening catalogue arrived a few days ago, the ‘face of woodworking’ is still smiling! I failed to recognise the store inside some years back but the catalogue has driven their growth from the beginning.

    Given the drying times for wood, the patience of wives after their requests, the ingenuity of tool short woodworkers and the used market with an abundance of unused tools, most of us are fine. Rob you are no doubt the best placed to see the frustration of newcomers to the art setting up shop. Rest assured, the catalogues will survive!
    ​You can do a lot with very little! You can do a little more with a lot!

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