By Alan Wolf, YSN
Faced with higher trans-Pacific shipping costs and the impact of COVID-related shutdowns at Southeast Asian plants, some furniture companies are shifting at least part of their production to Mexico.
According to industry news site Home News Now, Mexican-made goods offer competitive prices, comparable quality, shorter lead times, lower freight costs, and easier access to factories.
“It has paid off and has been a godsend for us,” said Jay Peters, Merchandising VP at Standard Furniture, which is adding Mexican-sourced upholstery and bedding to its South-of-the-border case goods at this week’s High Point Market. “We put our chips on Mexico about a year-and-a-half ago,” he told Editor-in-Chief Thomas Russell. “We kind of hit it at the right time.”
Indeed, Vietnam, Standard’s primary source, says its furniture factories could take another three to six months to reach 90 percent of their operational levels before COVID outbreaks halted production last summer, Home News Now reported.
Separately, factory delays, combined with the higher cost of containers, plywood, steel, foam, freight, and labor, have led at least five upholstery suppliers to impose additional price increases and/or surcharges, the news site said. “With a global supply chain in disarray, raw material costs and lead times are more volatile than ever,” Jackson/Catnapper told retailers in a letter announcing another 5 percentage-point surcharge.
“Unfortunately,” the letter continued, “there does not appear to be signs of relief on the horizon [and] in the spirit of full disclosure it is likely that more pricing actions will follow before the end of the year.”