🔒Broken links: Maine leaders find new sources to overcome supply chain shortages

Consumers know the feeling well. They go to the store for their favorite product and find nothing but an empty shelf. The retailer shakes his or her head and tells you it’s backordered.

Business owners face these challenges on a daily basis. The on-demand supply chain that characterizes modern business was shattered by pandemic shutdowns and subsequent shortages.

There are tales of container ships stocked with goods held up in port after a member of the crew contracted COVID. There are banks adjusting lines of credit to businesses to accommodate more costly shipping. There are retailers already warning customers that holiday goods may be in short supply.

We’ve all heard about the shortages of toilet paper, automobile chips and construction materials.

To find out how Maine businesses are adapting to shortages in supplies, we reached out to a dozen businesses, ranging from a boatyard to a chocolate maker to a retail car-servicing chain. We asked if there were specific products they have not been able to get and how they’ve responded.

Nearly all of the business leaders that responded said there were specific products that were in short supply: Fiberglass resin, antifreeze, engine parts, marine paint, air conditioning parts, oil filters, brake rotors, insulation, cabinets, appliances, coffee makers, coffee beans, cookies, coconut, peanuts (as well as peanut oil and peanut butter), freeze-dried raspberries, packaging materials, cup covers.

As JB Turner, general manager of Front Street Shipyard, told Mainebiz, “it may be easier to ask what CAN we get readily.” But nearly all the business leaders we talked to, including Turner, said they’d found some workaround — a different formula, a larger quantity, a new supplier or a new source.

“We do have contingency plans in place, and many of our suppliers have offered alternate product options to the ones we typically use. The key has been leveraging our planning process to give our suppliers as much information and lead time as possible so they can plan our needs with their production capabilities. We also have long standing relationships with many of our suppliers, so that has absolutely helped us with communication,” says Pete DeNoia, senior supply chain and warehouse operations manager at Allagash Brewing in Portland.

Here’s a sampling of responses from businesses.

JB Turner: GM, Front Street Shipyard, Belfast

We find the most bizarre things in the past six months to be out of. We never know it is coming. It started with resin and fiberglass — resin especially. When the freeze happened in Texas and there was a fire in the only other large resin producer in China — that pretty much killed the ability to get resin.

Now it is just random. We can’t get parts for engines, so we cannot get new engines. Someone decided to stop making non-toxic antifreeze, so we had to buy every scrap we could find. Last week we could not get Racor filters and we had to buy oil in 55-gallon drums because there were no 1-gallon containers available. Air conditioning parts are scarce.

Some paints are very hard to get — last spring certain colors were not available. Now it seems that most of our consumables (acetone, lacquer thinner, poly plastic, etc.) are getting hard to get in a timely fashion. There is no doubt that it is getting worse as opposed to better, or even improving.

Josh Henry: President, GO Lab, Belfast

It is a complete crap shoot. I would not say that there is anything that we cannot find, but some items have exceptionally long lead times. Other items are readily available and there seems to be no rhyme or reason to it. The problem for us has been that prices are volatile, which is a very challenging thing for a company seeking financing.

We recently had to fix equipment contracts for 60 days — it was near impossible and exceedingly expensive. How did we resolve the situation? Money...more money. There is a run on all building products, but insulation in particular. We had been importing large volumes of European insulating wood fiber composites for use in demonstration projects, but the backlog with our suppliers is longer than 6 months.

Mary Allen Lindemann: Co-owner, Coffee By Design, Portland

Everything from Chemex coffee makers not being produced fast enough to coffee beans stuck in port. Have I mentioned the bags we put the coffee in? No guarantees when they can be made. Every day we are problem solvers, number crunchers, detectives finding what had been a core item on hand somewhere, anywhere.

Kate McAleer: CEO, Bixby & Co., Rockland

Freeze-dried raspberries are an essential ingredient for one of our most popular items, and 90% of raspberries are sourced from the West Coast. The growers have been devastated by drought compounded by massive [wild] fires. The crop for 2021 was pretty much destroyed.

Short term, we bought out the stock from alternative sources at quite an increase in cost. This was a stop-gap action. We have had to suspend product and sales temporarily of the raspberry-based products and wait until the 2022 crop. There are no other sources in the interim.

[For] peanuts and peanut butter, our sources have been directly from the farms in the Carolinas. Chronic flooding has adversely affected the 2021 crop harvest. Along with severe labor shortages that have delayed production and processing. Normal lead times were within three weeks of placing an order, lead times are now two months or more. Our major farm supplier has become totally unreliable, and we have been able to research and bring in a new supplier.

With packaging, we were used to a three-week turnaround for the ordering and delivery of boxes, pouches, flow wrap film and wrappings. Delays of three to four months are now the norm. Add to that freight delays, extended timelines and soaring freight costs. Our attitude has been to get creative to try and get ahead of issues and communicate constantly with our partners. Constant communication is the key to navigating the white water rapids.

Tim Winkeler: President and CEO, VIP Tires & Service, Auburn

We have experienced out-of-stocks when attempting to order certain auto parts from our primary parts supplier, O’Reilly Auto Parts stores. Products impacted most often were oil filters and brake rotors. In every case when O’Reilly was out of stock, our teams have been able to find suitable replacement parts from different stores such as NAPA, AutoZone or Advance.

Concerning tires, of which we keep in-stock approximately 2,000 tires in most VIP stores, we have run into certain tires (specific brands and/or specific sizes of tires) that are out of stock from the manufacturer, but similarly to auto parts, we have been able to find secondary sources to buy other brands of tires in those sizes so that we have all sizes in stock, just maybe not all the same brands we would normally have.

No products have been impossible to source, but when we have to order parts from car dealers, many of those have a much longer delivery time than normal, like 2 to 3 weeks for dealer parts that are normally 2 to 3 days … Our teams, both in our centralized tire purchasing team and our teams in all VIP stores buying parts every day, the supply chain shortages have caused us to work harder to source what is needed for our customers, but we’ve always been able to find a way to get our customers what they need.

The other impact we are experiencing is significant inflation for both auto parts and tires. For example, most tire manufacturers have raised their prices at least four times in the last 12 months, by up to 8% each time.

Pete DeNoia: Senior supply chain and warehouse operations manager, Allagash Brewing, Portland

We’ve worked very closely with all of our suppliers (understanding required lead times, providing timely forecasts, being flexible with transportation/carrier concerns) and they’ve done a tremendous job supporting our business. To say that it hasn’t been a challenge to get certain materials would be minimizing the issue. However, we’ve been very fortunate not to have any short- or long-term supply chain disruptions. Though there have been a few times when we came quite a bit closer than we wanted to not having enough inventory. Also, the increases in pricing of pretty much all raw materials and transportation has been a significant challenge.

Eric Blom: Spokesman, Hannaford Supermarkets, Scarborough

I can tell you that Hannaford maintains deep relationships with a variety of suppliers that help keep items on the shelves and prices down. Since the beginning of the pandemic, there may be occasions when a specific item is unavailable while in transit or due to reduced variety from the supplier. We consistently strive to find new sources and supply channels when these challenges arise and encourage shoppers to only purchase what they need.

Lindsay Skilling: CEO, Gifford’s Ice Cream, Skowhegan

Broken cookies have been an ongoing issue this year, and due to low demand of cocoa, we’ve had delays and shortages on the production of cookies as a whole. Sourcing coconut was an issue for awhile this summer due to import delays and the well known issues with worldwide shipping almost every single industry is experiencing. We also had shortages of peanut oil and citric acid, and had to find supply in various ways.

For all the ingredients we had trouble sourcing, we ended up paying more through other vendors, and sometimes it took longer to receive them. At the [family-owned ice cream stands], we couldn’t get the covers to the Razzle cups, so we had to change it up and top our Razzles with more ingredients so we could forego the lid.

Corinne Watson: CEO and co-founder, Tiny Homes of Maine, Houlton

Cabinets and appliances have extremely long lead times, so that has been a challenge. The work around is we have to hold more inventory, which greatly impacts cash flow. There’s nothing that we haven’t been able to get, but supplier prices have gone up by at least 40% on some things and the availability is very difficult. We’ve lost clients because we’ve had to increase our prices. That being said, the demand is still strong for tiny homes — luckily.