Supply chain crisis impacts Tallahassee businesses, tests shoppers during busy holiday season

Tallahassee companies are scrambling to obtain products for the busy holiday season as the country struggles to quell constraints created by the supply chain crisis. 

Nearly every company has been impacted in some way. More than 200 manufacturing companies operate in Leon County and the surrounding area, said Melody Smelko, board president for the Big Bend Manufacturers Association.

From canning at brewing companies to producing steel for parts, she said there’s a wide range of shortages impacting local companies.

“It’s amazing what you think you’re not going to have any problem getting, and it’s not there,” said Smelko, CEO at Altrua Global Solutions. “Even getting materials in, and I’m speaking for us and also speaking for others that I’ve heard, what you could guarantee on a trucking line, you can’t guarantee that anymore.”

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At Altura, the print production company has been forced to adapt when supplies are not readily available. For example, wire stands for lawn signs are hard to come by since steel has become increasingly challenging to obtain.

Smelko advised consumers and companies to be flexible and plan early.

“If you’re looking at the last minute, it’s probably not going to work this year,” Smelko said.

Compared to larger cities with delivery hubs, Tallahassee may feel the supply chain crunch even more due to transportation and delays for getting resources.

In addition, labor shortages also add another layer that strains the system if companies don’t have employees to transport or produce products.

“This is a global issue and has been impacting our local businesses as they’ve met with the possibility of shipping delays and higher prices,” said Tallahassee-Leon County Office of Economic Vitality Director Cristina Paredes. “At the Office of Economic Vitality, we launched the Big Bend Manufacturers Association earlier this year, which is working to identify struggles our local businesses are facing with supply chain issues.”

'Deep and wide': COVID shocked the supply system

While some Tallahassee businesses may experience shipping delays, experts say larger retailers have the power to move mountains in this current climate.

Larry Giunipero, a supply chain management professor in the College of Business at Florida State University, said the current constraints created by the snarled supply chain comes down to priorities.

Major retailers are equipped to buy in mass and surge to the front of the line.

“I think the big box players, Lowes, Home Depot, Target and Walmart, I think they’ll take pretty good care of us,” Giunipero said. “They have the power.”

When asked if the United States has ever experienced a supply chain crisis comparable to what’s unfolding now, Giunipero said the today's supply chain issues rival previous commodity disruptions that didn’t “run this wide and this deep.”

The COVID-19 pandemic, he said, shocked the system. In March 2020, the rash of employee terminations and shutdowns cut capacity and created labor crunches.

Stimulus injections by the Trump and Biden administrations helped stabilize the economy, allowing more consumers to be flush with cash and ready to spend for the holiday season. However, demand is eclipsing supply.

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Local brewery deals with canning crunch

Marsha LaPete, co-owner of Greater Depth Distributing that works with Deep Brewing Company in Tallahassee, said canning supplies and aluminum materials are among the company's paramount challenges. 

"We get grain locally, so we don't have such a big issue with that," LaPete said. "But with canning supplies, those come from obviously a lot of different suppliers."

Larger companies, such as Coca Cola, Pepsi and Budweiser, are amassing aluminum materials, which creates challenges for smaller companies like Greater Depth Distributing. 

She said the company partnered with Tallahassee-based Iron Heart Canning Company since it can buy in bulk and work for several breweries.

The holiday season, LaPete said, is the busiest time of year for her company as residents look to give specialty brews as gifts. But, the supply shortage may prevent some varieties from being available. 

Specialty cans, which arrive blank and are later labeled, may be dropped off the runs due to supply constraints. In addition, LaPete said when bars and restaurants shut down, it forced more companies to turn to canning.

"That's what everybody did all at the same time, which created a huge demand in the market," she said. "We're just now starting to get back to that point of getting supplies. But, with that, came the issue of some Chinese canned suppliers who were going to come into the market. That's been on hold because of the (container) ships out at the docks."

It could get to a point where it's too costly to produce the specialty beers, especially for the tasting rooms. LaPete said the partnership with Iron Heart will determine what her company and Deep Brewing Company can roll out. 

"If we can't get supplies in, we won't be able to do specialty cans for the holidays," she said. "Any other time, if we ran short on say cans than we could switch to bottles. At this point, bottling is also at risk."

Contact TaMaryn Waters at tlwaters@tallahassee.com or follow @TaMarynWaters on Twitter. 

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Tips from supply chain expert on navigating the 2021 holiday season:

This year’s Black Friday will deliver customers a different experience due to supply snarls, said Larry C. Giunipero, professor of supply chain management at the College of Business at Florida State University.

Giunipero said there are three things to keep in mind:

1. Expect fewer doorbuster promotions. Retailers know that consumers are flush with cash and willing to spend it this holiday season. For example, a recent Mastercard Spendingpulse survey expected jewelry and luxury items to increase more than 50 percent in spending compared to 2020 levels. Once in the store, expect to see more normally priced items. Sales may run on slower-moving inventory and discontinued items.
2. Expect to pay more for the items you purchase on Black Friday. The supply chain congestion at ports and in the overall logistics system combined with higher demand means a continuation of inflation. Plus, finding basic appliances or basic electronic items will be challenging as retailers will stock higher-margin items knowing the consumer will pay.
3. Expect to wait longer, have less assistance finding goods and use more self-service to check out. The driver shortage and lack of port and warehouse capacity have restricted supply. Retailers are also going to be understaffed during the holiday season. Coping with this environment means either reduced hours of operation or struggling to service the expected surge of customers into stores. Frustrated customers may find the better option is online shopping and Cyber Monday.”