Personius & Company

smart-promos.com

IMPORTANT – PLEASE READ

An Open Letter to Our Customers and Friends

We are proud to be entering our twentieth year of serving our customers with promotional products and logo apparel. We understand the critical importance you place on timely delivery for products for your conferences, trade shows, and events. And, we’ve built our business and reputation around our commitment to deliver—and to resolve the inevitable problems and challenges that arise along the way. That commitment is the backbone of our service promise and a key reason why our customers choose to do business with us and stay with us for so long. We are truly grateful and appreciative of your loyalty!

It sounds unbelievable to say this in 2022, but the US and world economy no longer functions to minimal, acceptable standards. The “supply chain crisis” is bringing our industry to its knees. What do we see that makes us say this and what can you do to protect your business and events?

What we see

Inventory issues. Factories and suppliers in the US have low inventories. This is exacerbated in apparel due to out-of-stock situations in various sizes or colors. Source factories in China are still facing Covid lockdowns and shortages of labor and raw material. A shortage mentality of take-what-you-can-get-now is becoming more evident in buyers’ behaviors.

Labor shortages and much-longer lead times. When inventory is available, factories and decorators face labor shortages and are backed up in production. Pre-pandemic, factories that were able to reliably imprint and ship within three-to-five business days are now running at two-to-three weeks production times or longer. Many industry suppliers have suspended rush production options.

Transportation Collapse. Pre-pandemic, it cost roughly $3000 to ship a container from China to the US West Coast and would take roughly three weeks. Now, the prices for the same container are about $25,000-$30,000 and it can take months to get a spot on a ship, get the ship into port, get the container unloaded, and get the container out of the port and onto a truck. We expect things to get slower and more expensive as the holiday-related container shipments peak over the next few months.

Formerly highly-reliable FedEx and UPS have issues that are resulting in unprecedented delays and exceptions, including a substantial number of lost boxes. Just this past month, we saw an exception, delay, or loss on over half of our shipments. Sometimes, it’s just a day delay, fortunately. But sadly, we’ve seen too many inexplicable occurrences, including:

· International Priority Box from China to Miami lost, after clearing customs, in Memphis.

· Ground Box from Pompano Beach, Florida to Miami lost after being scanned onto the truck.

· Ground Box from Ft Lauderdale to Tallahassee routed through Chandler, Arizona and delivered nearly two weeks late.

· Overnight Priority Box from Salt Lake City to Miami sitting undelivered in Miami two days after apparently missing the plane connection in Indianapolis.

· Ground boxes shipped together from California to Miami separated and delivered over multiple days.

· Ground box from Ft Lauderdale to Indianapolis reported on schedule and on truck for delivery before exception/delay of truck returning to station and delivery rescheduled.

· Due to demand exceeding capacity on China-to-US air cargo routes, we continue to see many shipments sitting at freight forwarders/cargo hubs for days up to a week or more prior to actually boarding an aircraft out of China. We believe international priority shipments move faster than international economy shipments, but we cannot confirm that observation.

As such, we cannot rely on delivery guarantees nor recommend that you rely on them either.

Price inflation. Naturally, in an economy of product and labor shortages, there is a lot of pressure on prices. We are seeing price increases from 10-50% over the last year or so, when available.

Poor/no customer service. The stress at all levels of the supply chain makes it difficult to speak to actual people with knowledge. The ability of customer-service people, including management, to “fix” exception situations is severely diminished.

No immediate future improvement. We have been hoping to see improvement in supply-chain issues post pandemic, but our experiences are getting worse. We had hoped for a back-to-normal status by the end of the year. Now, we are pushing that hope to mid-to-late 2023 or later. Expect this “new normal” to continue indefinitely.

The bottom line is that product is getting harder to find and tougher to decorate. When you can get product, moving it from supplier to decorator to the final customer location is now a severe challenge. Every step is getting slower and more expensive.

What can you do to protect your business and events?

Plan way ahead. “Normal” planning lead times do not work anymore. Do not plan on receiving normal orders in under three weeks. We would recommend placing orders four-to-six weeks or longer ahead of the need at this point for US-sourced products and apparel. For Chinese containers, three-to-five months is probably the worry-free time. Also, do not fritter away “schedule fat” if you think you have time flexibility. In an environment where everything is becoming a crisis, do not add to the risk of your important events.

Make decisions earlier. In a similar fashion to planning ahead, we recommend a decisive attitude. We have seen decision delay result in lost inventory opportunities, price increases, and the need for unexpected express shipping. Again, do not add to the risk of your important events.

Buy shipping insurance. We now buy the shipping insurance on every box we ship. We recommend that you do the same.

Have an emergency or back-up plan. Think ahead about your alternatives.

What Personius is doing for you

At Personius & Company/Smart-Promos, we have implemented the following points to help you. Our goals, as always, are to help your events maximize their success while minimizing the hassle, worry, and risks.

Open, honest communication. We will keep you informed and always give you our best recommendations.

Inventory checks. We always check the inventory levels at the time of quoting and quote only available products. We provide warnings when we think inventory levels are low or questionable. However, we strongly recommend locking in inventory when available and to avoid unnecessary decision delay.

Schedule checks. We provide an estimate of delivery times at the time of quoting. Or, if you need product by a certain in-hands date, we will recommend an order-by date. However, we strongly recommend that orders be placed as soon as possible. It is always better to receive orders a day or two earlier than a day late.

Price quotes. We do our best to hold price quotes. We are explicit when known prices will expire. However, price changes are beyond our control. We strongly recommend that prices be locked in when possible.

Shipping insurance. As we said above, we now automatically buy shipping insurance for all orders and price it into our shipping estimates.

Tracking numbers. We provide tracking numbers or shipment notifications to customers as soon as we know them. We are now checking tracking status at least twice a day, more often when necessary. We strongly recommend that customers track boxes too; unfortunately, an estimated delivery date is no guarantee of an actual delivery date.

Rush orders / rush production. We are forced to suspend rush work for the bulk of our products and apparel. Rush has become expensive, disruptive, time-consuming, and is largely unavailable.

At Personius & Company/Smart-Promos.com, we remain 100% committed to bringing you the best promotional products and logo apparel at the best prices. We also remain 100% committed to bringing you the industry’s best service and advice because you will always work directly with an owner. You have our cell phones and emails and know that you can always reach us.

Our success is built on your success. We greatly appreciate your loyalty and patience in these unprecedented times.

Jim and Hanna Personius

Personius & Company

August 1, 2022

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