Supply Chains: Better Today, But New Obstacles Emerge

Posted April 12, 2024 at 1:01 pm

While laundry operators say their access to key commodities such as machinery and textiles has vastly improved since the COVID-19 pandemic, these companies as well as their supplier partners now face new obstacles. That’s the key takeaway from April’s cover article in Textile Services magazine.

The article, dubbed “Heavy Lift: Supply Chain Hazard’s Underscore the Need for Diverse Sourcing,” outlines key supply-chain challenges facing the linen, uniform and facility services industry across North America. These include spot shortages of electrical and various other components, and in some cases longer lead times for deliveries of machinery and parts.

One key change from the COVID-19 period of 2020-’23 is the increase in international instability that has slowed trade flows through key international transit points. These include the Suez Canal in the Middle East, which is effectively shut down due to attacks by Houthi militants angered by the Hamas-Israeli war that began in October 2023. “Ocean shipping costs had largely returned to pre-COVID levels until very recently,” said Paul Rasband, director of supply for Alsco Uniforms, Salt Lake City, in April’s cover story. He adds that, “There has been a recent spike in ocean-shipping costs that I attribute to the turmoil in the Red Sea/Suez Canal caused by the Houthis, which is causing ocean shippers to avoid the Suez Canal and sail all the way around Africa to reach Europe or the East Coast of the U.S.”

In the Western Hemisphere, a different challenge centers on the Panama Canal. There, the culprit isn’t war but rather a drought that’s restricted the ability of large ships to transit this manmade waterway that runs through the isthmus of Panama. The combined impact of these trade-flow restrictions have added to costs and shipping times for deliveries reaching North America, said Patrick O’Leary, director of planning and inventory management for UniFirst Corp., Wilmington, MA. “The current instability in shipping via the Red Sea and Suez Canal has caused rates to increase again, which is a situation we’re monitoring due to the ripple effect that this disruption can cause throughout our global logistics network,” O’Leary said.

These trends – ranging from the COVID crunch to today’s spot shortages – have altered buying strategies for the entire industry. The most common response by operators is to broaden their sourcing base by reaching out to new suppliers. Chris Welch, president of Prudential Overall Supply, Irvine, CA, said that while the situation today isn’t as bad as during COVID, it’s a concern that he and his team are watching closely. “There is nothing close in scope or scale compared to what was experienced during the pandemic,” Welch says. “However, the supply chain is still (and always will be to some degree) fragile, as demonstrated by current events in the Red Sea.” Consequently, says Welch, Prudential is looking for more opportunities to source goods closer to home. “We are increasingly interested in hemispheric sourcing and identifying firms that pull their products from the Americas,” he said.

Another operator, Dan French, VP and general manager of Gold Coast Linen Services, West Palm Beach, FL, said in a forthcoming May article that he decided to buy a U.S.-made 450 lb. (204 kg.) dryer from Ellis Corp. in part because the lead time for delivery was significantly less than some rival manufacturers. “When I shopped for dryers, one of the reasons I chose Ellis was the lead time at Ellis was 12 weeks to get a new dryer,” French says. “Some of their competitors were 12 months. So, what’s weird is that some of your equipment choices now are tempered by lead time, whereas they never used to be. Everybody was always about the same.”

For details, click here to see a PDF of the full article from April’s Textile Services. May’s article on Gold Coast will appear shortly.