Then Factor in the Supply Crisis
Crisis? What crisis? Haven’t we had enough of those?
COVID-19 impacted our health, our travel plans, our businesses, and our economies.
Now, it’s impacting the movement of every little thing that needs to travel from Point A to Point B. From medical equipment to bicycles, semiconductors to car parts – even your simple brown paper bags - the COVID-19 pandemic has caused delays and disruptions in supply chains across the World.
And if you don’t order your retail bags soon, you may miss out for the Christmas rush.
The global supply chain crisis is a real thing exacerbated by COVID lockdowns hitting manufacturing, wholesale suppliers like Smartbag, and logistics - affecting almost everyone across the planet.
Huge demand for goods delivered to our door has pushed the movement of raw materials and products into overdrive. Not long ago, you may not have given the supply chain a thought, but it only takes a few weak links to have a cascading effect on businesses and consumers.
How did we get here?
• High demand
• Labour shortages
• Industrial action
• Not enough ships and trucks
• Christmas is coming…
The Pandemic that Changed our Spending Habits
We couldn’t eat in, but we could order in.
The rise of home delivery services such as Uber Eats and Menulog, plus restaurants expanding their takeaway options, saw a surge in demand for takeaway paper bags.
Smartbag experienced an increase in sales of food takeaway bags. One major Sydney hospital ordered thousands to package meals for quarantine hotels. There was also a spike in general purpose kraft paper bags sales, to package facemasks for COVID-19 tests.
We couldn’t travel or wander around our shopping malls, so we poured our excess funds into online purchases. Working and studying from home lead to increased sales in office equipment and furniture. As community sports ceased, we took on hobbies and sales of jigsaws and croquet hooks skyrocketed.
According to an Australia Post Report, during the first three weeks of the recent Sydney lockdown, online shopping increased by 36% compared to the same period in 2020. Each of these products had to be picked and packed at supplier warehouses, trucked and/or shipped, then delivered to our door.Step in Australia Post and courier companies such as Toll, FedEx and Sendle who all recorded unprecedented demand. For Australia Post, every day is Christmas Day with the COVID-related demand coming on top of the general rise in popularity of e-commerce, particularly around online sales events such as Black Friday and Click Frenzy. During September, Australia Post put a 3-day pause on pickups from e-commerce retailers to ease the stress on their systems.
Supply chains are only as good as the humans that operate within them.
With the pandemic decimating businesses, labour shortages were bound to hit manufacturing both here and overseas. Workers were thrown into isolation and doors shut for COVID cleaning. No industry was immune - from meatworks to grocery chain distribution centres, to the local pharmacies – intermittent shutdowns had a dramatic effect on output.
In May 2021, one of the world’s largest ports, Yantian Port in China was shut down for almost a month due to a COVID outbreak. Container ships needed to divert to other ports and the closure caused a huge backlog of shipments. The knock-on effect of closures such as these across the World, has thrown shipping schedules into disarray.
Strikes are never good for a supply chain
Unloading ships onto trucks for delivery across the nation can only happen when workers are working.
Ongoing industrial action taken by waterfront workers negotiating new enterprise bargaining agreements to improve working conditions has exacerbated the strain on our international ports. Then the recent strikes by 7000 Toll workers, as well as Star Track and FedEx employees have delayed deliveries even further.
Where’s a Ship when you need one?
Ports across the globe are clogged by bottlenecks and delays, slowing the movement of goods.
During late October 2021, 100 ships were lined up off the Southern California coast with the average waiting time of 10 days to dock at Long Beach or Port of LA.i
Here in Australia, ports aren’t as congested however vessels are experiencing longer ‘idle hours’. According to the ACCC Report , waiting time to dock and unload has nearly doubled since pre-pandemic times.
The cost of freight on key global trade routes is about seven times higher than it was as little over a year ago. In January 2020 the cost to ship a 40-foot container for approx. $1,776. That same container now costs on average, $14,000 to move ii . The cost of shipping ultimately leads to higher prices of all imported goods.
Shipping is being diverted to those who can pay the most, with some importers and exporters paying a premium to move their stock, and no guarantee that they will arrive on time. In the US, The Home Depot found a way around the crisis by buying their own ship, while Ikea has purchased containers and chartering vessels to ensure their deliveries.
Here comes Christmas
Demand for deliveries always increases in the lead up to Christmas, and this year is going to be even busier. Add in the Black Friday and Cyber Monday sales to drive up demand even further.
For some in Sydney and Melbourne, the end of lockdown felt just like Christmas. Buyers who preferred bricks and mortar queued outside retailers, such as Kmart and Spotlight from midnight just to get their fix.
Major retailers have warned shoppers to get in early and buy now.
So, if your business is looking forward to bumper Christmas sales, be prepared and have enough bags and packaging ready.
If you need wholesale white or brown kraft paper bags , food takeaway bags , or general-purpose paper carry bags , don’t delay.
Order now for Christmas to avoid disappointment.
We have plenty of brown paper bags in stock right now!
For your custom bag needs, don’t hesitate to contact Smartbag, Australia’s leading provider of custom printed bags and logo bags. Email us at firstname.lastname@example.org, or call us at 1300 874 559.