2021 SUPPLY CHAIN HICCUPS

Hi Friends

Let me share with you what is going on in the overseas supply chain debacle of 2021.

I wanted to send out another quick status update so you are in the loop with what we are dealing with. As I mentioned before, this is a worldwide global crisis that is affecting all industries. I provided some links below where you can see how this is affecting NIKE, ADIDAS, Home Depot, Car Manufacturers, and even Chewy dog food. I know I sound like a broken record, and I can’t apologize and say I am sorry enough, but this has just been awful. I personally hate it and I am very sorry. We are no NIKE – heck – NIKE is the largest in the world and they are having issues. What all of us are currently dealing with is unprecedented. I truly appreciate those of you who have been understanding. 98% of you have been amazing. We have received some pretty nasty emails, which I understand. And we are sorry. We definitely did not see this coming 6 months ago and think it was going to be this bad.  Below are some links for reference as to what our industry and other industries are going through.

• Nike downgraded by BTIG amid continuing COVID-related supply chain disruptions

• Click here to read how NIKE’s production has been halted due to COVID

• Click here to read how NIKE and ADIDAS are being hit with Supply Chain Issues due to COVID

• Nike drops 5% as supply-chain issues lead to weaker-than-expected sales

• Carmakers’ Chip Crisis Isn’t Getting Better, Suppliers Say

• Events have conspired to drive global supply chains towards breaking point, threatening the fragile flow of raw materials, parts and consumer goods, according to companies, economists and shipping specialists.

• Auto industry hit hardest by supply chain disruptions during Covid pandemic

• Home Depot is one of the largest importers in the country. Yet with congested ports, container shortages and Covid-19 outbreaks slowing shipments, the company made a decision: It was time to get its own boat.

• How can retailers best navigate supply chain turbulence?

• AUSTRALIA TO KEEP BORDERS CLOSED FOR ANOTHER THREE MONTHS

• COVID-19 measures in Vietnam pummel an already bruised supply chain

Here are a couple things to PLEASE take note of. These issues are NOT going away anytime within the next 12 months. The bottleneck that we are experiencing today is from the factory shutdowns overseas that were occurring from November of 2019 until about May of 2020. North America was just starting to see COVID and the shutdowns at this time, while the rest of the world was on pause. And once the rest of the world tried to start up again the bottleneck occurred.  And caught up to all of us this past spring and summer. But now we have the Delta variant and these other countries such as Vietnam and China are just getting ravaged. The USA has the most vaccinated individuals of any country in the world and look how bad the Delta Variant is taking hold of our country. China and Vietnam are at a fraction of where the US is with regards to vaccines, so their solution is to just shut the countries down for 45 – 75 days and ride it out. This is good for them when they battle COVID, but it is going to create an incredible ripple affect over the next 12 months. So my opinion, please be ready.

Just last week Lauralee (my wife) sent me to the grocery store in order to purchase some Toddler formula for Scout, our 12 month old daughter. Now we are not talking about Special Sugar Free Formula with Beet root extract or anything. Just run of the mill formula. So I went to Albertson's first.  Zero formula on the shelf. So I drove over to CVS.  Again. Zero formula. So I asked. The manager stated the distribution center was out due to COVID. So then I drove to Target and they had ONE. Literally, ONE on the shelf.  So I bought it.  And every trip no matter what to the store, I buy as many as they have.

Here are some pics from my most recent visit to Walgreens. Again I asked the manager and he said supplies are incredibly scarce right now and they are having difficult times ordering enough items for their shelfs. This is Walgreens.  Not Bob's Corner Pharmacy.

On the bright side – the Delta variant has made its pass-through China and that country is opening up and they are eager to get going. The factories have put protocols in place and manufacturing is picking up. We are being told that over the next few months they can kits in 6-7 weeks after we place our order. I don’t think this same timeline will stick around in Q1 of 2022, but it’s a start and it’s a light at the end of a very long tunnel

In closing. Thank you again for your support. Thank you for your patience. We thought 2020 sucked and couldn’t get any worse until 2021 reared its ugly head. Now I can’t wait for this year to just end.

Good luck with the rest of your year. If you have any questions about anything, please feel free to email me or call me on my cell phone. I’d be honored to chat with you about this or anything else.

Sincerely

Matt Miller

303-981-2098