CHICAGO — Brad Shames is president of American Textile Maintenance in Los Angeles.
It’s the parent company of Republic Master Chefs and Medico Professional Linen Service and has provided hospitality, healthcare, and retail linen and uniform services in Southern California since 1932.
The company has experienced its share of challenges over the past 90 years, and the supply-chain obstacles over the past few years rank high on the list.
Fortunately, the situation is improving.
“It seems that things are normalizing more and more each day,” Shames points out. “Equipment is in its own world.
“Operators like us can buy more in bulk, which means increasing inventory on hand is an alternative being talked about more and more.
“More and more supplies are in inventory by our suppliers, and although much higher in cost, available.”
However, the improvements don’t mean that laundry operators can relax when it comes to ensuring they have the equipment and products and goods they need to deliver quality service to their customers.
CURRENT CHALLENGES
While the situation has improved, there are still hurdles for laundry operators with the supply chain.
“China’s zero-COVID policy continues to be a contributor to supply-chain disruption,” says Rick Kelly, vice president of sales and marketing for equipment manufacturer Pellerin Milnor Corp. in Kenner, Louisiana. “Labor availability continues to impact vendors’ ability to supply material/components and services.
“Each vendor has their own challenges. Some of the disruption is due to material availability. Some is labor.
“It looks like transportation and fuel are starting to stabilize, which reduces some of the delivery delays.”
Jeff Landry, executive director of CSCNetwork, an organization based in Franklin, Tennesee, that works with independent laundry and linen service operators, who has been speaking with vendors and operators about the supply chain, taking note of several factors, thinks inflation is going to be “more of a permanent fixture” when it comes to costs.
And rising labor rates are likely to become more permanent, affecting costs across the board.
“Domestically the cost of warehousing, the labor rates have dramatically increased,” he says. “The freight rates have dramatically increased, and part of that is labor. Part of that is fuel.
“I think the fuel surcharges have been coming down because the price of fuel has dropped dramatically. I think it’s down 50 cents over the last month.
“But the thing I think we’re going to see, I don’t know if it’s going to be permanent or much, much longer term, is the cost of labor seems like that’s going up, and I don’t see how that comes back down.
“The cost of rents for warehouses and such have gone up, but that will probably settle a little bit in the next year or two.
“So, this is kind of a new normal that laundry operations need to be aware of for the supplies that they need.”
Landry thinks the labor shortages and the labor cost is semi-permanent for the economy and that impacts the supply-chain side and the operation side.
“The laundry trying to operate knows the ability for them to hire people and what it costs when they do hire people,” he says. “If you are a textile warehouse with 70 employees and your average wage goes to, let’s say $17.25 an hour, that’s a pretty big impact. That’s pretty permanent. So, that cost is pushed along with the cost of the product.”
“Many vendors are very skeptical still and this truly needs to change if we are going to experience the wealth of the late 1990s again,” says Lenore Law, owner of ATS/California Textiles in Corona, California. “I think the skeptical outlook is from an overseas perspective since we still have severe labor shortages everywhere, and diesel is way too high and that is making transportation costs across the country much higher as well.
“Years ago, we used to rate swap on truckers and share discounts to save everyone money, and I’m not advocating collusion, but we truly need to pull together as an industry to get transportation costs lower.
“The truckers do this and even have an association in Virginia that is dominated by the large truckers, including UPS and Fed Ex and Old Dominion. I think it is high time our industry got involved, too.
“In terms of my company, I added both broker and direct rates and run them against each other to save my customers money on freight. Just saying freight is free and included really does nothing as nothing is free and has to be included into the bottom line somehow.”
Click HERE to read Part 1 with an update on the current supply-chain status. Read the conclusion on strategies on Thursday.
Have a question or comment? E-mail our editor Matt Poe at [email protected].
