Rising tariffs, global shipping delays hit local businesses hard
SANTA BARBARA, Calif. - A major backlog in the global supply chain has nearly tripled the amount of time it takes to ship products from overseas.
And that's a best-case scenario.
"Anything that's coming in from overseas, where it was usually eight weeks before, it's about 16 weeks to 20 weeks is what they're quoting," said Alan Bleecker, President and CEO of Capitol Hardware. "That applies for just about anything. I'm hearing that with appliances. I'm hearing it with lumber. I'm hearing it with drywall, steel."
NewsChannel 3-12 interviewed Bleecker back in March at his Milpas Street business. At the time, a logjam of cargo ships outside the Port of Long Beach was causing major delays for all sectors, from construction and plumbing to retail and design.
COVID-19 cases among longshoremen and a shortage of workers at the Port of Long Beach last Spring were partly to blame. Bleecker points to a new, critical shortage.
"The major difficulty right now that I'm hearing is that they can't get enough containers back to China to ship stuff over here. So, they don't have containers to put product in and when they do, it's extremely expensive."
Not only are customers dealing with major delays in the products they're ordering, they are also stunned by the price tag -- especially when it comes to stainless steel, copper, aluminum and other metal products.
Bleecker explained the reason behind the sticker shock.
"What we're getting now is distribution tariffs and shipping tariffs," said Bleecker. "They get added to our invoices and we don't know what it could be. It's up to 30% right now. So, we're getting 5, 10, 15 all the way up to 30% tariffs on top of what's coming in and the manufacturers say, 'This is just the way it is. This is what we're getting charged, we have to pass it along.'"
Bleecker said the mounting costs are very difficult to pass on to his clients. That includes Wally Blum, President of Blum Carrillo Inc. in Carpinteria, who's seeing higher prices with all of his suppliers.
"Copper wire is about 100% up," said Blum. "PVC (Polyvinyl chloride) is up 300% from a year ago. As an example maybe for a two inch PVC you'd pay 70, 80 cents a foot. We're about $2.50 now."
Blum said inventory challenges change day to day.
"You know, something you think is very common like plastic boxes, for example, sometimes they can be weeks out and you know, they should be in stock."
Abraham Camarillo, another Capitol Hardware client, said he's already two weeks behind on an order. Bleecker was on the phone helping Camarillo track down his product.
"It's about eight weeks that we placed the order. We're just trying to get ahold of them right now to see if we have an answer, try to get it as soon as we can."
A growing demand for United States-made products has added another layer to the shipping equation. Bleecker said the good news is that high lumber prices have peaked and are starting to drop. The bad news: don't expect that new stainless steel refrigerator you purchased weeks ago, anytime soon.
"I hate to be a doomsday prepper but I gotta say, it's going to get worse before it gets better," said Bleecker.
