Printavo is simple shop management software. We help you streamline your business, keep jobs moving forward and your team on the same page.
Scheduling, quoting, approvals, payments, customer communication, automation and more. With Printavo, you’ll work smarter–not harder.
Shortages and supply crunches have plagued a lot of industries since the pandemic upended global trade.
Look at the price of lumber, for instance:
A commodity that barely ever passed above $500 exploded to more than $1500 in less than a year.
Then it fell right back down, even faster than it went up.
If you're tired of seeing charts that behave like this, you're probably not alone.
"Out of sight, out of mind" is the attitude when things work – but the breakdown of the supply chain is apparent to everyone struggling to order goods now.
Just look at what Kimarie from Clockwork Enterprises posted:
Dozens replied with the same problem.
It's not just you. It's real, and it comes down to one thing: the shipping container.
I wanted to understand why there's a shortage in apparel.
It turns out the reason is pretty simple: a whole bunch of shipping containers.
But since that doesn't make sense on its own, let's dive a little deeper.
It all starts with cotton.
The history of cotton is fascinating and worth its own newsletter, but it's now a global trade that's concentrated in China, India, the US and Brazil. China has the lion's share of the world's cotton production.
My first thought was that coronavirus must have impacted the cotton harvests throughout the world. This wasn't the reality, however.
In 2020, cotton production was definitely lower than 2019. But it didn't matter. The forecasted supply of cotton was the highest in 6 years because of Chinese government policies.
So if the supply of cotton isn't the issue, what the heck is going on?
The global textile industry is wildly concentrated in China, with more than 50% of the world's textile output originating there.
While the textile trade captures more than just t-shirts and other products used for custom apparel, it's a great approximation for the center of the supply chain.
The factories, tools, laborers, and knowledge required to execute garment manufacturing at scale reside primarily in China.
But that's not where the customers live: the EU and US account for an astonishing $98B of textile imports every year.
An even more astonishing caveat to this long chain of goods?
It's not unrealistic to imagine a supply chain that involves 4 countries and some overseas travel:
The common thread there isn't even the cotton at this point. It's the shipping. We all need shipping.
Remember that goofy Suez Canal incident from a few months ago, when a giant cargo ship plugged up the world's bottleneck and basically stuck a pin in global trade for a few weeks?
Well, there's been a less noticeable...but more noxious...version of that brewing in the cargo markets for months.
All of those shipping containers that get shipped around...have to get shipped back.
For months, ports in the United States weren't sending back empty shipping containers (for every 100 received, they were returning something like 40).
This created a massive bottleneck where there simply weren't enough shipping containers when the global supply chain needed to switch back on.
So, of course, the price of shipping containers (shown above) is another one of these annoying hockey-stick shaped graphs.
It's definitely possible that this disruption lasts longer than anticipated.
But there's reason to be hopeful.
In the "it's going to last" camp, there are several factors:
For the "it's not going to last" team, there are some good points:
Ultimately, you have to roll with the punches.
What can shops really do to get ahead of the curve? Change how they react to the conditions at hand. Here's a few simple tips:
This is an excerpt from The Weekly, Printavo's newsletter. It's the easiest way to get educated in the print industry without paying a dime, delivered to your inbox.
Next Post: Print Hustlers Conference 2021 Preview!
Printavo is simple shop management software. We help you streamline your business, keep jobs moving forward and your team on the same page.
Scheduling, quoting, approvals, payments, customer communication, automation and more. With Printavo, you’ll work smarter–not harder.