Supply chain woes may continue in 2022 as China wrestles with containing the Omicron coronavirus variant. The country’s stringent system of lockdowns, quarantines and contact tracing is facing a difficult test against the fast-spreading Omicron variant, particularly as China is set to host the Winter Olympics next month in Beijing. Many in the business community, including the promotional products industry, are bracing for disruptions as China’s sweeping restrictions potentially derail manufacturing and shipping in the country.

Should China’s measures to control the pandemic disrupt the country’s shipping and manufacturing, it will further unsettle a global supply chain not fully recovered from the difficulties faced in 2021. Additionally, trucking companies and warehouses in North America, already shorthanded, are dealing with further employee absences due to Omicron-related illness. Data from logistics firm Flexport shows that in early January, goods took 113 days to travel from factories in China to the U.S. West Coast, a record high. In January 2019, the average transit time was 50 days.

“We believe that it is likely that we will continue to have disruption during the upcoming year,” says Jonathan Isaacson, chair and CEO of supplier Gemline. “While we hope that we are on the downslope of the Omicron variant here in the U.S., it is still spreading across Asia. And, even if this was not the case, given the amount of disruption, it is going to take a fair bit of time for things to return to a more normal state.”

Already, 13 million people in the central city of Xi’an are entering their third week of lockdowns. Tianjin, a port city of 14 million people, as well as several cities in Henan province and parts of Zhongshan and Zhuhai have introduced mandatory testing measures. So far, however, China’s largest port cities—Shanghai, Dalian, Tianjin and Shenzhen—have only implemented very narrow, targeted lockdowns.

“The zero-Covid policy recently implemented is going to add to further delays in the promotional products industry to the extent that the current three-to-four week lead time we’ve grown accustomed to will turn into six-to-eight weeks and pricing will continue to surge,” says Nadira Bakar, East Coast region manager at Houston, Texas-based supplier KTI Promo. “The biggest change I foresee is the availability of options. Our industry is accustomed to one item coming in various sizes and colors. Sometimes, that item can have sister products that make a line. We’ve been spoiled with abundance and with this newly enacted policy, I predict that items coming from overseas will come with fewer options.”

Bakar says, “I have already experienced factories scaling back offered colors of speakers, for example, and increasing their minimum order quantities. If the closures continue, it will prolong the supply chain bottleneck and contribute to the discomfort of surge pricing and a ‘hoard’ buying mentality.”

The supply chain issues are likely to impact companies in the promotional products market as well, demanding prompt efforts to prepare for or mitigate the effects of port and factory closures.

“There are always steps distributors and suppliers can take as workarounds,” Bakar says. “This will require more communication and partnership than ever. Distributors can mine for information from their client and relay it to the supplier and together, can come to a consensus about stock and ordering. The way I have approached it with some of my distributors is to use existing stock on hand and once more stock comes in (via air or ocean), to then print and ship as it comes.”

Isaacson says, “Each supplier has to manage this around their own specific set of circumstances. Gemline has a multifaceted approach that includes holding deeper levels of inventory here in the United States. In addition, because we have Gemline staff members on the ground in Asia, providing us visibility and control upstream in the supply chain, it gives us the ability to have more control over our own destiny. Given the current issues, it will take a lot of flexibility, agility and patience to manage through this.”

Bakar says, “I am hopeful that the creative minds in our industry will come up with more innovative ways to either manufacture, decorate goods or open up the global channel to other countries.”