I want to take a moment to provide an update on the current product distribution environment, including the disruption to our supply chains, pricing pressure, and the steps Rogards is taking to address these issues.
It would be redundant (and just downright unpleasant) to recap what happened in 2020. As we entered 2021, there was a great deal of optimism that recovery was on the way. I continue to believe that’s true, but this recovery has not been without significant challenges of its own.
Due to pressure that was put on the supply chain in 2020, we are still seeing shortages of product in 2021. When we all went home in April 2020, we all started ordering EVERYTHING online. Think about it – there was the online grocery phase, the “if I’m stuck at home I need new patio furniture phase,” the phase where we all realized we had gained the Covid-15 pounds and ordered exercise equipment…etc. All of this activity actually resulted in a back-up of cargo ships at various ports because so much product was being ordered from overseas that all merchants were trying to get more product into the market the same time. Once cargo ships docked, there were no dock workers to unload those ships (due to being short-staffed because of COVID-related absences or strategically reduced staff to allow for social distancing), and then once they got unloaded there was a shortage of truck drivers to deliver the products to their end destination (which was a developing phenomenon all the way back to 2019).
The dock situation has eased, but the shortage of truck drivers and general labor shortage continues. We rely on freight carriers to bring product to our warehouse, and they don’t have enough drivers for the loads they have scheduled. Our manufacturer partners are sharing with us that they have had to increase wages significantly and enhance benefits to bring employees back to their factories and warehouses. This is having two effects: 1) Products are taking longer to get to our warehouse, and 2) Product prices are increasing dramatically. Rising gas prices are also contributing to inflationary pressure on product prices.
Even though many of the factors I have mentioned are out of our immediate control, Rogards is doing everything that is in our control to manage price increases and to return our supply chain to the reliable, predictable, stable, environment that we have all come to expect. We continue to work closely with our vendor partners to make sure we can deliver the products you need at fair, market-based prices. We also acknowledge that the workforce shortage has had an impact on us as well, and we are seeking to fill open customer-facing positions to better serve you.
The past 15 months have been challenging. But I believe that Rogards will emerge stronger for having gone through this. I am incredibly grateful for the patience and grace that our customers have shown us, and continue to show us, as we work through these issues. We are laser focused on meeting the needs of business customers in our service area who are interested in having a true partner (not just another vendor) to help them get more done in the day.
Here’s to turning the page as we head into the back portion of 2021, and to the incredible growth and learning opportunities that sometimes show up disguised as global challenges.
President & CEO, Rogards