Throughout the supply chain crisis created by the COVID-19 pandemic, HFA’s Government Relations Action Team has been working diligently with our lobbyist in Washington to put forward all the concerns affecting every furniture retailer’s livelihood. The broken supply chain, with its systemic cost increases, is slowing the recovery of our industry and the U.S. economy.
On behalf of all our members and our industry, I’ve drafted the following letter to President Biden to stress the urgent need for supply chain relief and our desire to help come up with solutions.
Dear Mr. President,
We need your help, and we need it now. We, in this case, are furniture retailers. The North American Home Furnishings Association represents more than 1,500 furniture retailers (8,000 storefronts) from the Mom & Pop store on the corner to the largest retailers in the U.S. and all sizes in-between. They are in every state, in every city.
Broken links in our supply chain are hurting all of our businesses, negatively impacting consumer prices, and slowing down our recovering economy.
As you know, retailers in all sectors were forced to shut down their businesses in March 2020. In June of that year, as businesses reopened, the rebound for our industry was and remains significant. Thanks to our work-at-home world, the demand for all categories of home furnishings increased to historic levels. Our retail segment has been an enormous boost to the economy on a local, state, and national level when other retail sectors struggled.
Now, however, we are being hit with incredible cost increases, and this threatens our businesses and budgets of millions of Americans. The culprit is a broken and sputtering supply chain.
First, delays are oppressive for furniture and measured in months, not weeks. Our partners at the American Home Furnishings Alliance represent more than 200 of the industry’s leading manufacturers and importers. These companies manage a sophisticated global supply chain that includes factories in 31 states and dozens of foreign countries. They report that containers filled with products already purchased are backed up in our ports due to truck, railcar, and warehouse shortages, as well as a lack of manpower. Container ships are anchored offshore, waiting to be unloaded. These delays and shortages have spread from imported products to domestically produced goods. Domestic manufacturers have reported delays in U.S. production schedules as component parts are caught up in the same supply chain disruptions.
Second, home furnishings retailers don’t get paid for these purchased products until they are delivered, and therefore their employees who make the sale don’t get paid their commissions until delivery. That puts businesses at risk as they are over-extended, and they are losing valuable employees in a market where finding good talent is difficult.
Third, and most concerning, Mr. President, is the cost of shipping containers is up by more than 500% in some cases. That is staggering, and those increases are placed on manufacturers and retailers who cannot shoulder it all. This is why furniture prices have gone up significantly. For example, a member of ours who paid $4,250 for a container filled with 18 sofa sectionals pre-pandemic now is paying $18,000 for that same container. That is $800 more per sectional. No business owner should be forced to shoulder all those costs. This may be why other members report $199 mirrors are now $299, $749 dressers are now $899.
This inflation is driven by out-of-control shipping costs that threaten our economic recovery and put undue stress on American families, both the customers buying the furniture and the store owners who sell it to them.
Mr. President, we can give you many more concrete examples of these cost concerns. We can bring to the table the men and women who run these businesses to share their story. They need relief, and their customers need relief. This situation is urgent.
Mr. President, we want to sit with you and your team around a table and work together to ensure that this recovery continues and that the American people are not paying more than they should for the furniture they need. A slow supply chain and higher costs mean a slower economic recovery. No one wants that. We want to work with you and your Administration to fix these issues and keep America moving forward.
Chief Executive Officer,
North American Home Furnishings Association
Chief Executive Officer
American Home Furnishings Alliance