A BISG webinar held in early July sought to draw attention to the growing challenges in the book industry’s supply chain. Panelists pointed to shortages of truck drivers and trailers, congestion at the ports, and escalating transportation costs as factors that, in the words of David Hetherington, Book International’s v-p of global business development, were putting more pressure on the supply chain than at any time he could remember. In the ensuing two months, things have gotten worse, as printing capacity continues to shrink and labor shortages have made it difficult for printers, retailers, and wholesalers to fully staff their businesses.
Concerns have risen to such a level that the two biggest trade wholesalers, Ingram and Bookazine, have reached out to their accounts to urge them to take a range of actions to try to mitigate problems, informing them of steps they should take to be better positioned to meet the needs of the fall and holiday. Top of the recommendation list from both Ingram and Bookazine is for accounts to order as early as possible.
“We are experiencing shipping delays from the majority of our vendors and do not see the problem being eliminated prior to the holiday season,” said Cindy Raiton, president of sales at Bookazine. “We advise all accounts to allow extra lead time and to take advantage of stock availability knowing that reprints will be challenging.” Raiton said Bookazine is increasing inventory by 35%–40% over the comparable increases it took last year in the same time period.
For Ingram Content Group’s chief commercial and content officer, Phil Ollila, the factors cited above have come together to create supply chain problems that are almost certainly going to be more severe than even last year’s. Among Ollila’s concerns is that one bottleneck in any part of the supply chain could cascade throughout the entire system, slowing shipments even more. Ingram is ordering books earlier and in bigger numbers than usual, he said, explaining that if stores order early and in carton quantities, that will make it easier and quicker for Ingram to ship books out. While Ingram is taking steps to hire more warehouse workers, he added, it is also looking for any way it can to save time in fulfillment. Ingram is also asking publishers to get them the books as soon as possible to allow the wholesaler to stock titles as close to customers as possible.
Dennis Abboud, CEO of Readerlink, the major supplier of books to warehouse clubs and other mass merchandisers, as well as a publisher in its own right, said his primary concern at the moment is receiving shipments from overseas printers. “The domestic flow is doing pretty well,” Abboud said. He expects that about 5% of Readerlink’s own books may not make it to the States in time for the holidays. He credited the company’s decision, made earlier this year, to “back up” the publishing timeline, as well as Readerlink being in constant contact with Chinese printers in preventing the loss from being worse.
On the wholesale side, Abboud said an order from a major customer for Halloween had to be scrapped this year because of shipping delays. Abboud estimated that Readerlink could take “a seven-figure hit” to revenue because of not receiving all orders soon enough. He pointed out that publishing is not the only industry facing supply chain issues, noting that mass market retailers are in short supply on numerous items.
Abboud said that unlike trade wholesalers, who need to react to demand from stores, Readerlink works with stores to determine the quantities they need. Thus, Readerlink has the ability to make substitutes to displays if a particular book is not available. With a distribution network that can get to 95% of its customers in two days or less, Abboud is confident Readerlink will be able to meet its customers’ orders, as long as it has the product in place. But like others, Abboud is concerned that last-mile carriers such as Fed Ex could become overwhelmed closest to the holidays, especially if new retail lockdowns lead to a spike in direct-to-consumer sales. Abboud said he doesn’t expect supply chain problems to ease until next spring.
Along with the trade wholesalers and Readerlink, another key player in getting books into readers hands, of course, is Amazon. Asked how Amazon is preparing for the holidays, a spokesperson issued the following statement: “We will continue working closely with publishers to offer the best possible book delivery experience for customers.”
A juggling act
CEOs of two publishers with large lists of illustrated books coming from Asian printers, Michael Jacobs of Abrams and Tyrrell Mahoney of Chronicle Books, talked about the balancing act they are doing this season to ensure they get their key titles in time this fall. “It is a juggling act. You have to make trade-offs,” Jacobs said, noting that Abrams’s priority is getting its key frontlist titles into the States.
“The adjustments we have made are primarily centered around specific titles,” Mahoney said, “identifying and revisiting which ones are most critical and shifting priorities and schedules where possible with our printers as a result.” She echoed Jacobs in noting that Chronicle’s focus at the moment is on its fall lead titles, instead of backlist reprints in some cases.
Jacobs said Abrams has looked to bring some overseas printing back to the U.S. for a few years, but said there isn’t enough printing capacity. The skyrocketing cost of ocean shipping this year has made domestic printing, if it were available, all the more attractive. “No question the cost of goods has gone up,” Jacobs said. Mahoney added that, for some frontlist titles, Chronicle has paid a premium to secure a boat.
Both execs said they had built in extra printing time and moved on-sale dates for some titles to take into account the supply chain issues; they are hoping all titles planned for the season will be in place. “It will be a nail-biter,” Mahoney said.