Skip to main content

Cargo Carriers ‘Hitting Us With All Sorts of Surcharges,’ Exec Says

This month, the streets and showrooms of High Point, N.C. looked as they haven’t in a solid two years. With the Covid-19 pandemic canceling events and forcing many companies and buyers to skip markets, traffic has been slow at the past few iterations of the semi-annual furnishings trade show. But this market felt different for a lot of people.

“Not since World War ll have we missed a market—but Covid changed that,” said Tom Conley, outgoing president and CEO of High Point Market Authority. “Today, we are still recovering, and each market gets stronger. The buyers and exhibitors are returning, but the landscape is different. A few years ago, supply chains were only discussed at institutions of higher learning and logistics meetings. Now, grammar school kids know what it means.”

Those lingering supply chain uncertainties, inflationary pressure and reduced consumer demand had many exhibitors unsure how the market would rebound this fall. And while some reported slow traffic, other showrooms enjoyed a steady stream of visitors throughout the five-day show.

“We weren’t sure how it was going to be, but it’s been a great market,” said Taylar Hoffman, director of merchandising, American Leather.

Related Stories

And the busiest showrooms seemed to be those with readily available product and the ability to warehouse for their customers.

American Leather, for instance, boasted two-to-three-week lead times, even on custom pieces, along with space in its massive Dallas facility to stock product for its dealers. And the company launched a host of new collections this market, including several new sofas and recliners, as well as a high-end sleeper sofa line called Today Sleeper.

“With our new product and our lead times, our customers have been very positive,” Hoffman said. “They don’t have to inventory, so they can get their inventory from our warehouse and don’t have to stock.”

American Leather’s customization capability gives them an edge with a growing demographic of High Point Market buyers: Interior designers. Over the past decade or so, the market has positioned itself as a destination for interior designers, and companies that offer trade accounts and custom ordering have reaped the benefits of that designer influx.

“When I started with the High Point Market Authority, retailers were almost 60 percent of our buyer audience,” Conley said. “Today, that same percentage refers to the designer. Not every exhibitor sells [to] designers. But more are embracing the opportunity, and that’s been a very positive shift.”

Four Seasons Furniture made its return to market after taking the spring show off to catch up on orders. While the company wasn’t impacted by container delays since it produces upholstered and slip-covered sofas and chairs domestically in their Seagrove, N.C. facility, material delays coupled with inflated demand during 2021 and the early part of this year put them behind.

“Supplies are coming in better finally—that seems to have settled itself down a little bit,” said Chris Cogan, vice president of sales, Four Seasons Furniture. “That’s one of the things that has allowed us to get caught back up.”

Cogan said traffic in the showroom has been slower than pre-pandemic levels, and the retailers who have visited expressed concern about what’s to come over the next year for the home goods industry.

“Everybody’s a little nervous right now, and most dealers that come in are in the same predicament where their warehouses are too full, and there’s not enough retail traffic these days,” he said. “So it’s a nervous time, I think, for everybody.”

Cogan said that softened demand and overstocked inventory kept some of their customers out of the showroom this market.

“I know our reps have been contacting their dealers, and people are saying, ‘I’ve got too much in my warehouse and my business isn’t good enough—I don’t need to come to market now and place any orders for stuff that I really don’t need right now,’” he said.

For companies reliant on imports, like Barlow Tyrie, maker of teak outdoor furniture sourced from Indonesia, the freight situation has improved, but challenges remain.

“The containers have gotten better for the general rate, but now what they’re doing is hitting us with all sorts of surcharges and tolls and things that used to all be part of the price,” said Charles Hessler, executive vice president, Barlow Tyrie. “So it’s not as good as the lower figure shows, and when we were paying $22,000 a container a few months ago, we weren’t getting all these charges.”

Hessler said Barlow Tyrie is dealing with some of the same inventory issues retailers are grappling with, stemming from issues of only receiving partial shipments during the height of the supply chain disruption.

“For the past year-and-a-half, we got all the chairs we wanted, but no tables,” he said. “Now they’ve spent the last couple of months making me hundreds of tables, and then it all starts coming in the warehouse at the same time, and I don’t have any room in the warehouse.”

Hessler said the situation is beginning to get sorted out, but he anticipates a slower season during the coming year.

“You think recession, and a lot of these retailers have been getting late deliveries all fall and winter,” he said. “Some of our dealers have said, ‘Please don’t ship that because we have no room in our warehouse.’ So with all that in mind, and the economy teetering a little bit, I just don’t expect it to be a crazy-busy season.”

Cogan said he hopes the spring will pick up as far as demand goes, but he isn’t as optimistic about the next few months.

“The winter time for the furniture industry as a whole is typically not a strong time of year, and I think that’s going to be the case this year,” he said. “So I think we’re in for a rough fourth quarter, and then hopefully by the time late first quarter next year starts rolling around, we start to see it pick up a little bit.”