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Shipping Delays!!!

Shipping Delays!!!

I'm not a logistical expert, only a guy who runs a small independent music store in Canada. I'm sure that there are hundreds of contributing factors to the worlds various supply chain issues and I don't pretend to understand them all, that is for sure. I do however have some first hand experience in the world of musical instrument supply chain issues and I'm sharing those observations here in this blog. Hope that you find them interesting.

Back in March of 2020, when the world shut down for, at that time what was supposed to be 2 weeks, we had no idea of how insanely messed up our economy would get in the following months. Since then, we have all experienced at least a few of the various negative effects of Covid 19 most notably, the virus itself. So many unfortunate folks have contracted Covid 19. Thankfully, most have fully recovered but we all know of people who had a terrible experience with it and sadly, some who died as a result. The personal lose as a result of this virus has been devastating for many.

On the more commercial side of things, Covid 19 has caused a veritable ripple effect of chaos throughout the worlds supply chain. Before Covid, most of us never even considered the supply chain at all. For that matter, most people don't fully understand what the supply chain is, only that we all know now that it is messed up. How do we know that? Because if you are a consumer (and we pretty much all are), you are very likely waiting for something that you have ordered that wasn't available. Delivery delays are rampant across most industries. The automobile industry is in chaos with people waiting months if not years to receive new cars. Try to order a new bike, a new boat, a jet ski or basically any recreation item. You will be waiting and in some cases, companies won't even take an order at this time from you. Imagine! you want to order an expensive recreation toy and the dealer says NO. It's true, I tried to order a jet ski earlier this year and the dealerships told me that they wouldn't take a new order until later in 2022. Bizarre but true.

In the music industry, a new order for a home digital piano placed today will take up to 12 months to arrive. Some of these same models that were ordered a year ago have still not been delivered. A new guitar order in some cases are in the same boat. Pretty much every category of the music industry is affected to one degree or another. Be it guitars, drums, woodwind instruments, electronics (especially electronics), or PA equipment, all experiencing huge delays.

WHY??? Well, that is a question that has been asked a million times in the past 18 months. The answer is not so simple and I have learned in my experience this past few years that there is no one answer, rather, more of a potluck of circumstances that all contribute to the mounting delays and backlogs. As well, since the first lock downs back in 2020, each and every day of diminished production capacity has compounded to create an ever growing backlog of orders that have not been fulfilled.

Take for example a guitar factory that produces 500 guitars per day, which by the way, is a typical A list company's capacity. If in the first month of the pandemic it was forced to close for 30 days due to lock downs, it would have missed out on producing 10,000 guitars in that one month alone. Now, consider that for the next 18 months, they were only able to product 60% of their guitars because of restrictions, shortage of supplies and any number of other factors. That is another 72,000 guitars that they wouldn't produce during that time for a total of 82,000 guitars they are now behind in production. Wow, that's a lot of orders to catch up on. Now, add to that, the fact that for the first year of the pandemic people went crazy buying guitars (and boats, bikes, exercise gear etc) increasing the usual demand by say even 25%, some say closer to 50%. Add that to the pile and now our guitar company is backlogged by well over 100,000 guitars. Assuming that they get back to full production (most are not yet) and that they could produce an extra 50 guitars per day, it would take them approx 2400 days or 480 weeks to catch up ... AND ... each day that companies are not at full production, this backlog gets bigger, not smaller. So, since the world is still grappling with Covid to some degree, it is safe to say that the recovery in terms of order backlog has NOT started yet and is still getting worse.

So, if this were the only issue, it is easy to see why your new order for anything may not be available and may take a very long time to arrive. Truth is, the biggest problem with the supply chain is people. Since Covid effects people by making them sick, they miss work which slows down production. When governments impose restrictions in the name of reducing transmission, it slows down production. When production slows down, we get backlogs (see previous paragraph). Once that happens, the supply chain starts to break down. Also, since some delays are worse than others, items that would normally take x amount of days to arrive at a manufacturer now take x plus 40% or more. Even if a manufacturer is ready and able to produce their products, they depend on other items to arrive on time and they don't always. This causes delays in production which get passed down the chain and so on and so on ... It is a giant hot mess. Then, when a product finally does get built, there are horrendous backlogs at the shipping ports. Again, mainly because too many workers are either off sick or there are restrictions to the number of people who can work on the ships or, the entire port is closed because of an outbreak. Again, another huge factor. Add to that, containers that used to cost $3000 to ship across the ocean now cost $25000 because of high demand. This causes companies to either raise their prices or ship via a slower ship, adding to the delay and cost. Once a ship arrives in North America, all of the same issues with the shipping ports repeat adding more delays. Mix in a shortage of truck drivers and warehouse staff and you are starting to get the picture. A LOT of people are involved in manufacturing any item, packing it, trucking it, shipping it by water or air, receiving it, trucking it, warehousing it and ultimately getting it to you.

So, to recap, the problem is a massive combination of issues including first and foremost, backlogs in production. Your order won't even get started for months. Then add in the longer time it will take to produce your product. Add in the increased time it will take to transport your item and you now start to understand why your darn guitar is going to take 10 months to arrive.

Having said all of that, it's a minor miracle that music stores have any instruments in their showrooms but they do. Even though the supply chain is truly in a shambles, people are making due with substitute products and different solutions. Eventually, things will recover and companies will catch up and get back to a more normal lead time. In the meantime, we have learned that it really doesn't take much of a disruption to really mess us up and create a huge backlog in supply. In the end, it really does come down to the our health. We have taken it for granted but Covid may have shown us that without our collective health, many things can breakdown shockingly fast.

Hope that helps shed a bit of anecdotal light on the situation.

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