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Oct. 28, 2021

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Clark County businesses shackled by broken supply chain

Pandemic-caused shortages, increased delivery times leaving many scrambling

By , Columbian Assistant Metro Editor
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Jon Creedon's stock of new cars at Vancouver Ford is nearly gone, and it's mostly due to a global shortage of computer chips that new Ford cars need to be delivered to dealerships. It's affected about every car seller in Clark County to some extent.
Jon Creedon's stock of new cars at Vancouver Ford is nearly gone, and it's mostly due to a global shortage of computer chips that new Ford cars need to be delivered to dealerships. It's affected about every car seller in Clark County to some extent. (Amanda Cowan/The Columbian) Photo Gallery

Romano Capital. Vancouver Ford. Slumberkins. Juliano’s Pizza.

Each is a very different local business selling widely differing products and services, but they all are dealing with a similar — and massive — problem: a worsening supply chain issue at this point in the pandemic.

Almost everything is taking longer to be delivered, mostly items being shipped from Asia, including cars, furniture and toys. Products and services are costing more during the shortage; much of that is passed on to consumers.

It’s another hurdle for many businesses, especially restaurants, that are still dealing with a pandemic-driven labor shortage. More than 11,000 people are regularly filing for unemployment, but once the extended benefits programs run out in September, that will likely nudge many people back to work.

Lumber

Romano Capital, a development company, has seen the price of lumber triple during the pandemic, causing the finishing price of a home to increase by about $90,000. It’s something that most, if not all, construction and development companies in Clark County are dealing with.

“Everybody is dealing with it,” said Chrissy Cole, executive vice president of construction and procurement at Romano Capital, Inc. “It’s not just lumber. Siding has gone up. Steel is going up: rebar for concrete, PVC for plumbing, the cost of copper has gone up. There’s a shortage of electrical wire. There’s a shortage of breakers.”

The wait times for receiving products are unpredictable, she said. One supplier discontinued six product lines, causing the company to shift what appliances they’re putting in new homes.

Lumber prices peaked in June from Cole’s supplier, which cost $45,001 for a 1,595-square-foot house’s lumber package. At the beginning of 2020, before the pandemic, that same package was $13,377.16.

Lumber prices are starting to drop again as supply picks up to meet the demand, but the ripple effects are still being seen in home prices.

The sales price of a house that size closed in June 2020 at $329,900; the price on a 1,595 plan in selling August was $425,000 — an increase of $95,100, Cole said.

“From lumber to windows, to appliances, the entire supply chain that supports the building industry has been disrupted,” said Andrea Smith, spokesperson for the Building Industry Association of Clark County. “Costs for building materials have soared since the onset of the COVID-19 pandemic, but nothing has been done to correct these issues.”

Though the solution to the supply chain disruption is multifaceted, Smith said that it requires all levels of government and industry to collaborate to alleviate some of these pressures.

“The BIA believes the easiest solution in the short term would be for the governor to rescind the Washington State Energy Code until the supply chain for building materials stabilizes,” she said. “Much of the new energy code requires products and materials that are harder to source and come at a much higher cost to the builder and the home buyer.”

Computer chips

Jon Creedon’s stock of new cars at Vancouver Ford is nearly gone, and it’s mostly due to a global shortage of computer chips that new Ford cars need before they can be delivered to dealerships. It’s affected about every car seller in Clark County to some extent.

“Ford has had thousands of cars finished except for the chips,” he said.

Early in the pandemic, Ford started scaling back chip orders, so computer chip suppliers sought out other buyers, like computer and appliance companies that had a sudden surge in demand. But demand for new cars came roaring back later in the pandemic, and now Ford can’t order chips from those suppliers at the same rate, Creedon said.

“We find ourselves with very few cars on the lot,” he said. “Normally, on the new side, would have 375 to 400 new cars. We have 75 new cars today.”

Just about every new car coming to Vancouver Ford through November is claimed by a buyer, he said.

“I don’t expect the ground stock to increase for another 60 days,” he said. “Getting back to normal is unknown.”

Used cars are filling in the demand for new cars, but prices have gone up steadily, and there’s a shortage of parts for used cars, he said.

“The supply chain across the board is not functioning well,” he said.

Toys

Slumberkins, which produces educational, emotional support stuffed animals and books, is one of many companies with Asian suppliers seeing delivery delays up to three times longer than normal and increased materials prices.

With the holiday season coming up, new toys will be more expensive, and they might be delayed well past the holidays due to the shortages of materials and extended transportation times.

“It’s really every step along the supply chain. Not just for Slumberkins, of course,” said Marissa Williams, vice president of operations for Slumberkins. “There are shortages in materials, and lead times have become longer.”

Some of the materials for Slumberkins’ product lineup have reached 90 days — three times longer than pre-pandemic. Part of the reasoning comes from driver shortages, she said; Many truck drivers were laid off when the pandemic hit, and they sought more stable jobs.

Slumberkins follows what larger toymakers are doing with pricing, and other companies have decided to bump up prices to match the materials and shipping price increases.

“Products across the board are double as expensive to produce because of all these challenges,” she said.

The company has also had to find creative solutions to solve the shortages, including changing printers of its books from one in Asia to one in Illinois.

“Our customers are understanding because we’re transparent about the issues,” she said.

Food

Two weeks ago, Kim Meadors, owner of Juliano’s Pizza in Vancouver, got a call from her main food supplier that she’s been using for 21 years. The supplier said they had to cut off their businesses because the company can’t logistically deliver food to her restaurant.

“The district manager said over 20 accounts he had to call and cancel their business,” she said. “It was in effect immediately. It was alarming,” she said.

Luckily for Meadors, a Portland-based food supplier stepped up and had filled in much of her needs. But things such as new knives are taking four months to receive.

“All restaurants are dealing with the food shortage to some degree,” she said.

Local food supply stores such as Restaurant Depot and U.S. Foods, which many local restaurants depend on for ingredients and other products, are limiting what they sell because of the shortages.

“It’s tragically broken,” said Bonnie Brasure, owner of Bleu Door Bakery.

Brasure’s food supplier told her that it doesn’t have the staff to deliver the food or maintain the warehouses, some of the largest factors to the food shortages.

“They said, ‘you might get your order; you might not,’ ” she said.

Prices for Bleu Door have gone up, even though Brasure has resisted them until the bitter end. Bacon, for example, went from $52 to $94 a case.

“I would love to find some lettuce, some berries; produce is challenging. Flour. Oil. Oil is ridiculous. If you can get it, it’s expensive.”

The bakery is also under construction, and Brasure’s costs have gone up because of that. She can’t find the staff to fill her open positions, and now with the delta variant staging a threat, catering reservations are starting to cancel.

“How are we supposed to survive?” she said. “Every day is harder.”

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