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Where’s my sofa? A foam shortage is leading to delays and higher prices on furniture, RVs, more

Where's my sofa? A foam shortage is leading to delays and higher prices on furniture, RVs, more

INTERNET MARKETING NEWS

Where’s my sofa? A foam shortage is leading to delays and higher prices on furniture, RVs, more

COVID-19 shortages: 3 things that might be hard to find this summerShortages may make these three products hard to find over the summer.Staff Video, USA TODAYStill waiting for that sofa you bought in January? Or boat? Or RV? Or refrigerator? Or house?Want to know why?Foam.A nationwide foam shortage has compounded supply chain bottlenecks and delayed product deliveries in myriad industries, including furniture, mattresses, autos, boats, recreational vehicles, appliances, building construction and steelmaking.Foam is the spongy material that gives seats and upholstery their fluffy feel and provides insulation in appliances, homes and commercial buildings. It even serves as lining in molds that cast steel.   The shortage began when February’s winter storm shut down all five U.S. plants – four in Texas and one in Louisiana – that produce the main chemical, called propylene oxide, needed to make foam. Some Gulf of Mexico region factories that churn out other foam-related feedstocks were also idled by the storm but the propylene outages were more devastating because they wiped out all U.S. production.Taking a look: Is the economy’s big comeback starting to fade?Racial justice in the workplace: In-depth look at diversity’s struggle to crack corporate boardroomsThe plants were shuttered for just several days, but it took weeks to ramp them back near full tilt. That’s because they were running at 120% capacity to meet strong consumer demand when storm-related power outages and flooding knocked them out abruptly, damaging equipment, according to Jerry Epperson, managing director of Mann, Armistead & Epperson, an investment bank for the furniture industry, and EverChem Specialty Chemicals.Even today, some of the plants are still at just 80% capacity, says Zachary Moore, editor and analyst for Independence Commodity Intelligence Services, a petrochemical research firm.Because most manufacturers rely on lean, just-in-time inventories, they couldn’t draw on surplus foam in the warehouse to keep their plants humming. Instead, many have been shutting down a couple of days a week while they await foam deliveries.Playing catch-upAn even bigger problem: February’s chemical plant shutdowns and slow recovery significantly intensified order backlogs that developed last year because of strong customer demand and other COVID-19-related supply constraints, Moore says.Americans stuck at home because of the pandemic were buying furniture for their new houses in the suburbs. And they were snapping up RVs, boats and cars as they embraced outdoor activities conducive to social distancing.  In other words, even though the chemical factories are now running closer to full speed, they – along with foam, furniture, RV, appliance and other makers – are still working their way through massive piles of backorders. And many manufacturers are giving retailers limited product allocations.“We really couldn’t catch up,” Epperson says.For consumers, that often means waiting many months for new furniture, an RV or an appliance, and paying significantly higher prices.“This has put everything in disarray,” Moore says.To be sure, the supply chain is beset by other COVID-related pressures, including shortages of steel, plywood, microchips and chlorine, among other commodities, not to mention trucks and shipping containers. Factories, warehouses and ports in the U.S. and overseas were closed or only partially operating for many months because of illness and social distancing.Yet in many industries, the foam crisis made things substantially worse because it was such a big blow to production, industry officials say.Furniture sale delays are taking monthsThe furniture industry was hit hardest by the crunch because foam is such a big part of its products. Last year, deliveries that usually take 30 days stretched to 60 to 90 days because of other supply chain problems, Epperson says.This year, the foam shortage has meant some shipments are taking as long as a year, he says. Many factories are operating every other week so foam deliveries can catch up to other parts in greater supply, Epperson says. That also allows workers to receive unemployment benefits for the weeks they’re idle.Graham defends Chick-fil-A: Sen. Lindsey Graham says he will ‘go to war’ for Chick-fil-A to be on Notre Dame’s campusAs much as half of outdoor furniture has been affected – higher-end pieces that include seat or back cushions, says Jackie Hirschhaut, executive director of the International Casual Furnishings Association.  While other supply constraints have posed hurdles, “this was crippling,” Hirschhaut says.Last year, sales increased about 4% for indoor furniture and 4.5% for outdoor pieces, but this year revenue has been flat despite soaring demand as a result of the foam troubles, Epperson says. The crisis is the main culprit in a 40% price increase for retailers and a 25% bump for shoppers.“Everything is just a mess,” says Nick Johnson, owner of four Su Casa furniture outlets in the Baltimore area and a couple of Southern Delaware beach towns.Johnson has about 70% of the stock he normally carries, and customer orders are taking an average six months to deliver, up from a typical two to three months, with some taking nine to 12 months, he says. Customers who can’t get their preferred sets sometimes settle for second or third options. Others walk away, leading to lost sales, though many people return because all furniture retailers are coping with the same obstacles, he says.Some people don’t mind waiting because they’re moving into a new house that also isn’t ready as a result of that industry’s supply chain problems, Johnson says. To accommodate them, Johnson rents a shipping container to store their new furniture.   Sometimes, he says, a manufacturer raises the wholesale price even after he places a customer order, hoping he’ll just cancel it to ease the supply strains. But he can’t pass along the increase to customers who have already made the purchase, erasing his profits.Despite the hassles, Johnson is clocking high double-digit sales increases. But, he says, “it’s incredibly stressful.”Boats for sale? Stock is running lowWhile furniture retailers are running low on stocks, many boat dealers have almost none. Oquossoc Marine in Oquossoc Maine has just one used boat at the dealership compared with the five to 10 Lund fishing boats and cruising pontoons it usually displays. Boatmakers need foam for seat cushions.“I really haven’t had a new boat to sell since last fall,” says Ray Lewis, a manager.The dealer is placing orders for customers, but the boats are taking nearly a year to arrive, compared to a normal two to three weeks, Lewis says. And prices are rising so rapidly that many customers are placing orders for boats costing as much as $100,000 and higher without knowing “exactly how much it will cost,” he says.No matter. Sales are up about 60% this year after a double-digit surge in 2020.Oquossoc is no longer taking orders for delivery this year and will soon be booked for 2022 shipments as well, Lewis says.RV sales near me? Don’t expect a quick processRecreational vehicle manufacturers, most of which are based in Elkhart, Indiana, have done a better job than other industries of trying to be efficient despite the foam problems. Many assemble the rest of the RV, waiting to install the driver and passenger seats and furniture at the end, says James Ashurst, executive vice president of the RV industry Association. Unlike furniture makers, they have that luxury because of large production yards.  Still, some orders are taking up to a year, compared with a normal two to three months, he says. And shoppers are paying the manufacturer’s suggested retail price and higher for some RVs – a nearly unheard of development in an industry known for its discounts, Ashurst says. He attributed the delays to record customer demand as well as the supply bottlenecks, including foam.Despite the hurdles, ”We expect 2021 to be our best year ever,” with RV sales of 575,000, up from the record 504,000 in 2017, Ashurst says.Appliances are taking months to deliverMany appliance shoppers are also cooling their heels. Bray & Scarff, a dealer in Arlington, Virginia, has few items in stock, and customers may wait up to six months for delivery, up from a typical two to three months, says Lee Ali, who helps coordinate online orders.Foam is used to seal the doors of various appliances and keep the cold in refrigerators, Moore says.Car rental shortage and impact on summer travel, explainedFrom rental cars to new cars, there is a shortage in the motor-vehicle industry. Here’s how it may impact summer travel.Just the FAQs, USA TODAYCars are hit hard by two different shortagesThe auto industry mostly has been wracked by chip shortages and other supply chain snags since last year, Moore says. The foam troubles have posed yet another headache for manufacturers, and though most of the impact was felt earlier this year, they’re still causing some delays, says Harris Ng, a partner in the automotive practice of consulting firm Kearney.But he says the problem has been tempered by the reality that automakers can’t produce as many vehicles as they would like anyway because of the chip shortage. Also, autos are better positioned than other industries to cope with the foam issue because they produce high-value products in high volumes, and so far suppliers give the industry priority as they allocate limited supplies, Ng says. The economy needs millions of workers: So why can’t college grads find jobs?Wells Fargo to end all personal lines of credit: It could affect credit scoresFoam is used in seats and as insulation in vehicles.In June, there were 1.4 million vehicles sitting at U.S. dealerships, down from 2.7 million in January and 3.6 million in March 2020, according to research firm Cox Automotive.“There were some challenges we had to work through with our supply base regarding propylene oxide shortages” early this year, says General Motors spokesman David Barnas. But he says the carmaker didn’t “experience any production impacts,” and “this has not been raised as an issue recently.”Diversity check-up: What Amazon, Disney, Walgreens and others won’t tell you about the diversity of their workersMattress sellers get creative A few manufacturers are getting creative and finding foam substitutes. Some mattress makers are using more springs to offset the foam deficit, Moore says. And Lippert, which makes mattresses for RVs, has used woven fiber in some of the 4,000 mattresses it makes daily, CEO Jason Lippert told Reuters in April.The foam shortage led Temper Sealy International, the top bedding provider, to push back the launch of its new Sealy Posturepedic Plus Hybrid and foam products from after Labor Day to early next year, according to Home News Now. The company also canceled a fall savings event planned for October, the publication said.


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