Just when women’s clothing retailer Smash + Tess thought it had conquered supply chain disruptions caused by the pandemic, the Richmond, B.C-based company was hit with another unprecedented event late last year.
In November, just ahead of the holiday shopping season, severe flooding across B.C. washed out critical ground transportation routes required for the company to get its products manufactured in Vancouver to national and international markets.
“That caused a big logistics issue for us because nothing on trucks could leave our distribution centre – or it could get stuck for months – so we had to make the really quick call to air freight everything out, which, as you can imagine, was pretty expensive,” says Ashley Freeborn, founder and CEO of the company best known for its rompers.
In addition to air freight, the Smash + Tess team kept in touch with customers wondering about the status of their orders. Some staff even hand-delivered packages to loyal customers in more accessible areas across the Lower Mainland.
“We’ll do everything and anything to make it happen for our customers,” Ms. Freeborn says.
Smash + Tess in the past six months has shipped more than 6,000 orders outside of Canada, mainly to the United States and about 30 other countries such as Australia, Britain, Netherlands, France, Norway and China.
The shipping situation is “fluctuating constantly,” Ms. Freeborn says.
For instance, the latest COVID-19 outbreak and lockdowns in China have shuttered textile mills and closed ports, delaying shipments the company is waiting for. Smash + Tess has air-freighted materials from closed ports to open ones and has sourced materials from mills in Toronto and Los Angeles to keep its goods moving.
Ms. Freeborn says her team is constantly finding creative solutions to supply chain problems.
“We’re just trying to figure out logistically how we can keep it happening,” she says, adding that diversification of suppliers and shipping routes is critical. “You [don’t] want to have all your eggs in one basket.”
Supply chain disruptions are often local and not global – at least not all at once – as was the case with the pandemic, says Sanjith Gopalakrishnan, an assistant professor of operations management at the Desautels Faculty of Management at McGill University in Montreal.
He says lockdowns uncovered flaws in the global supply chain and with just-in-time manufacturing strategies where goods are produced to meet demand. Companies “have to plan for these disruptions,” Mr. Gopalakrishnan says. Examples include diversifying suppliers and shippers so they are closer to home, building up inventory, or limiting the variety of products sold to manage delays.
Companies should also consider manufacturing closer to home, Mr. Gopalakrishnan adds.
During the pandemic, some major retailers acquired shipping companies to gain more control of their supply chain while others, such as Canadian Tire, chartered cargo ships to carry their goods, he says.
Mr. Gopalakrishnan adds that exporters and governments need to recognize disruption could become the “new normal.
“Maybe things go back to how we had them pre-COVID, but that may not be the case; you may just experience further disruptions,” he says, including geopolitical, environmental or health-related events.
In Canada, the B.C. floods highlighted the importance of Vancouver’s port system and the fragility of the land routes to get goods from there to the rest of Canada, adds Greg Wilson, director of government relations in B.C. for the Retail Council of Canada.
He says he believes the federal government needs to boost port capacity in B.C. for ships and container storage and improve redundancy. Mr. Wilson adds that plans on the table have yet to be approved. Canada should also improve its north-south shipping routes affected by last year’s floods.
A new wrinkle in the global supply chain is Russia’s invasion of Ukraine, which is limiting shipments of commodities and other goods. Many of these container ships have Russian or Ukrainian crews, and “they’ve been put to other uses,” Mr. Wilson adds.
He notes that small businesses have a much harder time managing supply chain issues because of their limited resources compared with larger companies. Rising costs of the workarounds are also harder to absorb.
Ms. Freeborn of Smash + Tess says supply chain setbacks have led to higher costs and squeezed the company’s margins. Recently, it felt it had no choice but to pass some of those costs on to consumers.
“We offered free shipping for a long time, and we’ve had to reinstate a threshold shipping amount just because we’re getting slapped with these really intense increased costs in shipping,” Ms. Freeborn says.
“We’re consistently making the choice on how much margin we can sacrifice to ensure that we’re going to get our materials on time, or our orders are going to go out on time.”
Despite all these logistical challenges, Smash + Tess is still set on a global “romper revolution” and expanding its international customer base.
“It’s challenging when there are further obstacles in the way, and you don’t really know what’s going to happen,” Ms. Freeborn says.
The company believes that communicating with customers is the best way to manage through turbulent times: “It’s keeping them in the loop, ensuring they know what’s going on and being as transparent as possible.”
Ms. Freeborn expects supply chain issues to continue in the coming months. “I’m hoping 2023 is brighter.”