Business is getting back to normal, but…

Severe hanger shortage is holding back the recovery

Dry cleaning business is on a fast track to getting back to normal. Its recovery slowed down during the summer months but is gaining steam since September. Many cleaners say they are back to pre-pandemic level. This recovery is more pronounced in non-metropolitan areas. But one problem is frustrating dry cleaners nationwide: hanger shortage. With more orders coming in over the counter, the hanger shortage is getting so bad that you can’t buy them even at a premium price. It is due to the supply chain problems. Online shopping spree during the pandemic has not only strained ocean freight, it also caused a severe bottlenecking at the ports and ground freight.

“We advise customers to plan their supply chains well ahead, particularly for the upcoming holiday rush,” writes Maersk in its Asia Pacific market update sent to customers on September 27. “We expect strong export demand from Asia to continue for the rest of the year particularly into the U.S. and Europe. Inventory levels in Europe and the U.S. remain at their lowest levels on record, leading to stock outs on some products. This means even once retail demand declines, we will see cargo volumes continue to remain strong as inventory levels need to be rebuilt.”

Nora Nealis, the executive director of NCA, told American Drycleaner magazine “There are a lot of workarounds you can do for other products, but how do you work around not having hangers? Fold it up and give it back to the customer?”

Reduction of wire hanger supply was expected due to pandemic. Demand plummeted when dry cleaning business plummeted to 20~30% level. Hangers bought for a month’s supply lasted several months and it really didn’t matter if a hanger order took several months to arrive. But with vaccination, people left home and it put a severe strain on the supply chain.

Jay Hong, president of CleanAir Supply in NJ said “factories make hangers but have no containers to put them in. When you do find containers, you can get them on the ship,” adding “skyrocketing freight cost is adding fuel to the fire.”

One industry expert noted “containers used to arrive in 2 months, 5 at the latest. Not it takes 8 to 9 months.” He also added skyrocketing freight is driving up hanger price.

Maersk warned “we expect Q4 to be stronger for Asia imports with network utilization remaining above 95 percent,” but the carrier also points to congestion in ports and supply chain bottlenecks as the “true drivers of high freight rates.”

Los Angeles Port is experiencing a record traffic jam. Ports all around the country are having a huge backlog, further straining the supply chain.

Speaking on a Bloomberg TV interview, the Port of Los Angeles’s Executive Director Gene Seroka said the pressure points are throughout the supply chain. While liner capacity has increased 30 percent on the major trans-Pacific routes and vessel productivity is up 50 percent in the port, Seroka admits that cargo is sitting longer at the ports and warehouses and vessels are backing up.

M&B Hangers that has a factory in Leeds, AL is not suffering from this ocean freight problem but still has to manage raw material and ground freight problems. Mac Magnus, vice president of M & B told American Drycleaner magazine “we are back to pre-pandemic production and are currently working to add production to fill the gaps in the market.”

“We also need our steel vendors and our paper vendors to work and grow their business,” Magnus says. “Transportation and everything involved on the input side needs to come back.”

This is not the first hanger shortage but past problems went away in a couple of months. Even when Chinese hanger imports got hit with tariffs, you still could buy them albeit at a higher price. Dry cleaners have never had to deal with a situation where you can’t buy hangers before.

“We need to build back our stock,” says Jay Hong, “once containers start to arrive on schedule, the situation will improve.”

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