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Leed’s Forced to Extend Holiday Lead Times

Top 40 supplier Polyconcept North America told distributors on Monday that it is unable to keep up with a surge in demand for hard goods offered by Leed’s (asi/66887), and it will need to extend its lead times to maintain shipping dates for existing orders. In a letter written to the company’s distributor customers, PCNA announced that the standard lead times for drinkware, laser and pad printing decorating methods from Leed’s are now 10 days, and eight days for all other methods.

“As a supplier that prides itself on high quality and quick delivery, we did not take this decision lightly,” wrote PCNA President David Nicholson in the letter. “But in the end, our commitment to you as a trusted, reliable supplier remains a far more important factor.”

Nicholson told Counselor that PCNA’s other divisions have seen an increase in activity, but are maintaining their normal lead times. The company is targeting mid-October to return to its normal lead times for its Leed’s orders.

In the letter, Nicholson said that Leed’s has been experiencing “a significant increase in order volumes,” and while this is normally the case heading into the fourth quarter, “this year’s increase occurred rapidly – far more dramatically than we have seen in prior years. In fact, September is on track to be our busiest month of the year.” Nicholson speculated in the letter that the surge of orders may be a hopeful sign of reversing slowing growth in the industry, as well as new momentum for the economy to carry through the election and the rest of the year.

Since the beginning of August, PCNA has hired additional staff and extended shifts (including weekends) to try and meet the demand. “This will continue and remains our top priority until we can return to our standard lead times,” Nicholson wrote in the letter. The company also said it is striving to “improve our process and communication around order ship dates – and remain very sensitive to critical orders with firm event dates.”

Nicholson cited to Counselor the difficulty of a “tighter labor market which has compounded the challenge of ramping up capacity.” The growth of online shopping (and the resulting crush of online orders around the holiday season) has intensified the search for temporary holiday workers. In December 2007, there were about 650,000 employees in the U.S. warehousing and storage sector. Last December, that number reached nearly 850,000. In addition, the unemployment rate sits at 4.9%, which prior to this year had not reached that low since 2007.