PPB October 2021

opportunities for decorating facilities domestically. “I anticipate an increase in domestic decorators or increased traffic with existing decorators,” says KTI’s Bakar. The company has stocked items domestically, such as USBs, power banks and Bluetooth® ear buds at its Houston warehouse since the Dangerous Goods Act was implemented a few years ago. Recently though, the company has begun stocking popular products at its overseas facilities so that orders can be decorated there and shipped to Houston. “This removes the additional time of gathering material, assembly and quality control,” Bakar says. “So far, this has been successful for mid-level orders and quantities.” Diversification of sources is another potential outcome of this crisis. “Distributors will have to look for alternative sourcing and not just rely on goods imported from Asia. Local and nearshore manufacturing will be looked at more closely,” says Preslow’s Presburger. Bakar says this ripple effect will force suppliers to pare down their selection of products, change their logistics to what they can warehouse locally and will likely mean growth for domestic decorators. Garment Gear’s Strickland believes companies will seek out ways to become more efficient when it becomes absolutely prudent for them to do so. He says, “It does take some time for companies to navigate through these new waters, but the good ones will come out better—both for the company and their clients.” Like in many other industries, the long-term effect of the supply chain issue will mean higher prices, and suppliers predict marketers will be forced to increase their promo budgets or reduce the number of items they purchase. It’s also an opportunity for distributors to be creative and resourceful. “The promotional products industry is not immune to the same inventory and pricing issues they are experiencing in their everyday lives as consumers at the retail level,” says Pioneer Balloon’s Jenkins. “The good news, of course, is that distributor buyers are closer to the situation and origins of supply. They can help find and manage solutions for their customers and business and prove their immense value to their clients.” And there’s more good news. On August 27, the White House announced it would appoint John Porcari as port envoy to the Supply Chain Disruptions Task Force, which was created in June. He will be working with the Department of Transportation and the National Economic Council to address congestion at U.S. ports, a problem the White House admits has existed for years. Client Communication Is Vital Honesty, transparency and timely communications are key strategies successful suppliers are using to manage distributors’ expectations and avoid frustration and disappointment. “I can only manufacture what we have on hand. We let our customers know—we are very transparent,” says Cheng at Redwood Classics. “We are also being proactive in providing solutions and recommendations. For example, ‘If you’d like solution A, your delivery might be longer, if you want solution B, your delivery might be shorter, but the cost may be higher.’” At KTI, salespeople are staying in constant touch with clients on delays, but also promoting items that are in stock for quicker delivery in their Houston warehouse, to give them options. LBU’s Scaduto says his team is letting customers know upfront that they are dealing with delays and increased costs, so there are no surprises. “Our domestic production is filling up quickly and production times keep getting pushed out, so we are advising them to plan ahead and place orders early with plenty of time for delivery,” he says. “The epic interruption in the chainof supply (decreased demand and supply) exacerbated the inherentproblems in shipping by sea. It will take time to stabilize this very slowsystem.” —Mark Jenkins, MAS+, managing director of promotional markets, Pioneer BalloonCompany FEATURE | The Supply Chain Crisis 44 | OCTOBER 2021 |