Pioneer Imports and Wholesale has been waiting on a shipment of Chinese-manufactured silk flowers and plants for almost two months.

The fall merchandise, packed in a large metal shipping container and loaded onto a container vessel, left the Port of Yantian in China on July 5. It arrived at the Port of Long Beach in California two weeks later, where it remained at sea for six days before it was unloaded — a wait time unheard of until this year.

More than a month later, the container remains buried among stacks of thousands of other containers at the backlogged port, said Pioneer President Dave Botchick, who has been tracking the shipment since it left China.

From his office in Berea, Ohio, Botchick can do little to expedite the shipment. His frustration is compounded by his diminishing profit margins due to the skyrocketing cost of freight, he says. Adding to his worry is whether the seasonal merchandise will arrive at his warehouse in time to sell.

“This is a serious problem not only in our industry, but for every industry,” he says.

Botchick’s dilemma mirrors that of many importers in the floral industry who are battling persisting global supply chain issues just as the busiest floral holidays approach. Faced with months-long delivery delays and the skyrocketing cost of freight, importers are being forced to re-evaluate product lines, profit margins and the basics of how they do business.

The Domino Effect

What started with increased demand for manufactured goods last year escalated with shortages in supply caused by availability of raw goods and COVID-19 related shutdowns at overseas factories and ports. Those closures led to gaps in factory production time, backlogs at ports and a shortage of shipping containers which were tied up in ports rather than being recirculated. The result is an over-stretched global infrastructure and unprecedented demand for containers and space on shipping vessels.

“This remarkable, sustained import surge is pushing the supply chain to new levels,” Port of Los Angeles Executive Director Gene Seroka said in an August news release. He noted that overall cargo volume at the port — the largest in the country as measured by container volume and cargo value — is up nearly 37 percent compared to the same time last year.

Ports worldwide are “simply overwhelmed,” Patrik Berglund, CEO of the freight tracking firm Xeneta, said in a news release. Backlogs are tying up vessels and containers “in an ever-worsening cycle of delays.”

Just last week the Marine Exchange of Southern California reported that a record 44 container ships were waiting outside the state’s ports. The usual number of ships awaiting entry is zero to one. The Port of Los Angeles estimated ships calling at its port were waiting up to eight days, according to data on the port’s website. With the holiday season logistical rush round the corner, things may get worse before they get better, according to Berglund.

Freight Fright

The price of freight has increased by more than 85 percent since last year, according Xeneta. For smaller importers, such as some in the floral industry, the percentage is even higher.

Botchick says last year freight cost $4,000 per container. This year, he is paying up to $25,000 per container, an increase of more than 500 percent.

“We are glad we’ve had good business this year because that helps us absorb the costs,” he says.

Nick Fronduto, chief operation officer at Jacobson’s Floral Supply in Boston, says his company is also paying four to five times more for freight this year and absorbing as much of the cost as feasible. The company can handle smaller profit margins for the short-term, Fronduto says, but the situation doesn’t look to be improving. A freight quote he received last week was the highest yet.

“We are faced, in some cases, with freight exceeding the value of the container,” Fronduto says.

Smithers-Oasis is facing the same challenges.

“We are taking a hit on margins because our customers will take a hit on theirs,” says Laura Rich, director of marketing and product development. “We realize we are all in this together. If the industry isn’t doing well, Smithers-Oasis isn’t doing well.”

Mitigating Risks

With profit margins shrinking, importers are looking for ways to mitigate risk.

At Smithers-Oasis, that’s meant hitting pause on some items that either weren’t strong sellers, or are cost prohibitive to get in, Rich says. The company has slimmed its inventory to products that sell well and are still affordable to import.

Jacobson’s is keeping its warehouses stocked with products they know will sell, such as basic glass vases. He advises his customers to do the same.

“If you see something you like and you know you’ll need, buy it now,” Fronduto says. “It may not be there tomorrow and if it is there tomorrow, the price might be higher. The prices certainly aren’t going to go down, and if they do it certainly won’t be this season.”

His biggest challenge is planning orders far enough in advance without knowing how much freight will cost or how much consumers will be willing to pay.

“It’s very fluid. It results in trying to take some measured gambles,” Fronduto says. “There is a lot of crystal balling.”

He is keeping a close eye on consumers’ buying habits to help him decide which items have enough value to continue importing.

“Ultimately, customers will vote will their pocketbook in terms of what items have value,” he says.

The Waiting Game

Meanwhile, import companies are facing another risk: the timing of seasonal merchandise deliveries.

Botchick’s container stuck at the Port of Long Beach typically would have been delivered in June, ahead of the August start of the fall selling season.

“We need it now,” Botchick says of the merchandise. His company has already sold through its carryover stock from last fall, and just last week received two overdue shipments. If his shipment of autumn silk flowers and plants doesn’t arrive within the month it will be too late to sell it, he says.

“Once it gets to the first of October, no one wants to buy fall,” he says.

Fronduto is also concerned about how the delays will impact his company and his customers.

“If I have a container of scarecrows and they show up in December, I’m not going to do anything with those scarecrows for a year,” he says.

He also knows that florists are relying on his company’s merchandise to boost their holiday sales.

“If florists miss an opportunity to sell an item one day, it’s not like they have the opportunity to make that sale the next day,” he says.

Jacobson’s fall imports are slowly coming in. Some of it is still on the water, and some is held up at ports, and time is of the essence. His floral customers typically like to have their fall merchandise right after Labor Day.

“We are right on that cusp,” he says. “Every day now is critical in terms of getting our product in.”

Amanda Jedlinsky is the managing editor of SAF Now.