NEWS

Shortages Hit Small Businesses

Global supply chain problems challenge local businesses

By Mike Sunnucks

Scott Linde, owner of Lizard Licks art shop in Gulfport faces supply chain concerns over fair-trade works from Haiti.

Scott Linde, owner of Lizard Licks art shop in Gulfport, knows firsthand the supply chain problems vexing ports, manufacturers, retailers and consumers worldwide as economies grapple with the impacts of COVID-19 and shortages of truckers, dock workers and other employees.

Linde says his challenges are somewhat unique. His fair-trade Gulfport shop sells art (including pieces made from recycled metal drums) from artists in Haiti. Haiti, which already struggles with extreme poverty, has seen added instability this year with the assassination of President Jovenel Moïse in July by alleged foreign mercenaries along with a 7.2 magnitude earthquake and damage from Tropical Storm Grace in August.

“It’s a more severe situation in Haiti than any place else in this hemisphere,” Linde says. “They have 50% unemployment and they have COVID and they just shot their president.”

That’s created uncertainty about getting products from artisans and artists shipped to Florida from the island nation.

Linde says he still has inventory at his shop inside the Gulfport Beach Bazaar but is concerned about what will be on his shelves going forward.

He’s responded by ordering more products to maintain inventories, ordering 90 days worth of inventory instead of a 30-day stock.

“I’m investing in a 90-day inventory, ‘cause I can’t go out of business,” Linde, who also gets fair-trade products from other countries, says.

Other local businesses are also battling supply chain problems — often centered around products manufactured in China and backups at large ports including in the U.S.

Arthur Jay has been in the fabric business for 62 years and says he’s never seen these types of supply chain challenges.

Jay owns Jay’s Fabric Center on Pasadena Avenue South in St. Petersburg. He’s seen unprecedented increases in freight costs as well as shipment delays stemming from impacts of the pandemic and shortages of truck drivers, port workers and other labor links in global and regional supply chains.

Jay says freight costs are up as much as 30% to 40%. “It is a significant amount,” he says.

The fabric store owner says freight previously accounted for 2% to 3% of products’ costs. “Now freight can run 10% to 20% of products.”

Dynamics such as that put inflationary pressures on scores of products impacting consumers and other businesses. The U.S. economy continues to see increased inflation hitting consumers and businesses with higher prices for fuels, materials and consumer goods.

Jay says port closures in China earlier this year due to COVID-19 contributed to the logistics challenges. But even when products make it to U.S. ports there are delays, he says, pointing to a recent fabric shipment that arrived in Miami but got stalled just across the bay. “It stayed in Tampa for almost a week because they didn’t have drivers to bring it over here,” Jay says.

Jay says the increased costs also often preclude other transportation and logistics alternatives.

“You can’t fly anything in because the cost is prohibitive,” Jay says.

He also says businesses that ramp up inventories could run into situations where they are overstocked with goods.

Supply chain challenges are also hitting other local small businesses with shortages and shipment delays for everything from tequila and beer from Mexico to imported soaps and parts for HVAC systems.

Brian Wilson, office manager with Custom Airworks HVAC, says the Gulfport business has had some challenges with getting in certain parts and components from suppliers.

“Sometimes we have to search around for other suppliers,” Wilson says of the shortages and inventory challenges that started in the middle of 2020 during the pandemic.

Manufacturers, farmers and other suppliers pulled back on production and workforce levels during the early stages of the pandemic. They have since had to navigate economic fluctuations from COVID-19 spikes and declines along with serious labor shortages and employee turnover.

The U.S. economy lost 20.6 million jobs early in the pandemic. The economy is still down 4.2 million jobs from February 2020, according to October jobs data from the U.S. Bureau of Labor Statistics.

Florida lost close to 1.27 million jobs from February to April 2020 ...where Gulfport gathers and has gained back more than 1.06 million of those positions, according to state economic numbers. That still leaves a 205,400 job deficit from pre-pandemic levels adding to strains on workforces and production chains.

Wilson said inventory challenges for HVAC parts and systems have shown some recent improvements.

But the Gulfport company still has to turn to other suppliers at times.

“For whatever reason, we just have to search,” he says.

Restaurants, grocery stores and food markets are also seeing some shortages and product delays — along with high turnover and workers vacancies.

Kevin White, a manager at Billy’s Stone Crab restaurant in Tierra Verde, is also seeing delays in getting branded merchandise, such as t-shirts.

“It took me three months to get them in,” he says in addition to challenges in the restaurant’s kitchen.