How supply chain disruptions are affecting Columbia Sportswear's business
MICHEL MARTIN, HOST:
Lockdowns, mask mandates, capacity restrictions - over the past 18 months, businesses large and small have had to adapt to a slew of challenges. And now there's a new challenge, supply chain disruptions. We're hearing about it all over. Just about every sector is being affected by the slow movement of goods, from food to computer chips to clothes. So we thought we'd check in on one business leader to hear how he and his company are coping. For that, we're turning to Tim Boyle. He is the CEO of Columbia Sportswear. And he is with us now.
Mr. Boyle, thanks so much for joining us once again.
TIM BOYLE: Well, thanks for asking me to join you.
MARTIN: So are the disruptions we're hearing so much about affecting your business? Can you just kind of paint a picture for me?
BOYLE: Well, it's really global, honestly. The - you know, the merchandise moving around Asia in vessels has been impacted. Factory closures throughout Asia, where most of our merchandise is made, obviously is impactful. And then you have the sort of the double whammy of freight moving from Asia to the West Coast of the United States and around the world, to Europe, et cetera, at - in a time when COVID's impacting it. And then the - because of the nature of these consortiums, which have been established over the last several years, managing the freight between companies, we saw just an enormous, staggering increase in the price of container shipments.
MARTIN: And how would your customers be feeling this? Are there delays in getting things that people want? Is the price escalating?
BOYLE: Well, yes. It would be both delays and price increases. So there's a little bit of everything, honestly.
MARTIN: Last week, President Biden announced that the ports of Los Angeles and Long Beach would be open 24/7 in an effort to address the backlog of cargo ships. Is this going to help you?
BOYLE: It will if we can get the next bottleneck in line, which is the chassis, which move the containers from the ports to various places. You know, over the last 30 years, American businesses and, really, global successful businesses have been operating on, you know, just-in-time inventory - don't carry too much inventory, have it all available the moment that you need it. And then when you get a disruption, as we have had in the last 18 months, it just is exacerbating. So some of this was, I guess, predictable. But yeah, it's going to be impacting us for quite some time, I believe.
MARTIN: We have heard a lot of warnings to buy early for the holiday season. But how are people going to do that if they don't - if there's no inventory? How is this - what are you doing to prepare?
BOYLE: Yeah. Well, so we have merchandise in stores, and we have merchandise in our retail customer stores. Honestly, Americans have been quite spoiled. So if you wanted a jacket in size large, in 15 colors, you probably could choose from any of those. You know, you may have to - instead of buying a large jacket in navy blue, you might have to buy a large one in green. There is merchandise around, but it's just not going to satisfy the American consumer the way they'd been used to buying.
MARTIN: Is there anything keeping you up at night about this whole situation?
BOYLE: Well, the pressures on inflation are going to be severe, in my opinion, over the next several years. And, you know, our company, like most businesses, have not seen inflation in years - maybe 20, 30, 40 years in the case of the apparel business. It's really been a deflationary commodity. And now we're looking at inflation for the first time. And it's different managing a business when prices are increasing versus managing when prices are constantly decreasing.
MARTIN: That's Tim Boyle. He's the CEO of Columbia Sportswear. Mr. Boyle, thanks so much for talking to us once again. Keep in touch.
BOYLE: Thank you. Will do.
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