From China to Best Buy: Gaming controllers hit bumps on way to U.S. consumers
By
"Clearly a forklift," he mutters.
The damage could have happened anywhere along the 10,710-mile odyssey his company's gaming controllers make from
A global breakdown of supply chains in the wake of the COVID-19 pandemic, which led to a sharp contraction, then a snap back in demand that caught most businesses wrong-footed, has overwhelmed ports and left manufacturers, retailers, railroads, and truckers scrambling to get goods to shelves, especially in the crucial runup to the year-end holidays.
The number of container ships idling off
The situation is so dire that a White House task force is working to ease the backlog, while shortages of imported goods are blamed with helping fuel an inflationary surge that has the Federal Reserve as well as many consumers on edge.
The pileup casts a shadow over a globalized system that T2M and many other producers have relied on to get products made cheaply in distant factories. As companies developed these supply chains, they whittled down to the bare minimum the stocks they kept on hand. That is great for the bottom line, but a disaster when supply lines clog as they have now.
T2M's mobile gaming controllers, including the only full-size device designed to work with a hard wire on an Apple (AAPL) iPhone, are sold by Best Buy (BBY) and other big chains such as Walmart (WMT) and Target (TGT), and on Amazon.
Townley doesn't own a factory. Instead, like countless other consumer products companies, he designs the devices and has them made by a Chinese plant. He has a
Feng said the crisis hit a boiling point in June, just as they were doing a push to get goods to
Speaking at the Chinese plant - where rows of workers in blue smocks and white caps hunched over workbenches assembling and testing controllers for T2M - Feng said it felt as though conditions were easing a bit by October.
"But now, after the new strain (Omicron) has appeared, we are actually still worried about whether it will go back to the situation as before," she said.
NOTHING IS NORMAL
T2M has limited ability to jump to other Chinese factories in this crisis. Feng noted that only a handful of factories are able to produce controllers that meet the Apple (AAPL) certification required by customers. "If we were going to replace our factory, it would not have been fast," she said, so they didn't even try to find alternatives.
They did, however, have to find new routes to get containers to their
In the past, he would ship them to
Now his normal procedure is to ship goods to
But nothing has been normal in recent months.
In September, he had a shipment of controllers he was trying to get to a distribution center in
The controllers were on their way to
"Unfortunately, everyone but the Customs people could be flexible," said Townley. His solution was to air freight more controllers straight from
Costs have exploded accordingly. Townley now pays about
Problems don't end once the controllers get to his warehouse. Finding truckers to haul goods to end customers has become such a challenge that Townley explored buying his own truck. He decided not to do it.
As a small company, he has no clout with his customers to pass along those expenses. Instead, he's rushed to cut costs. He picks up one of his controllers and points to the brightly colored buttons. By skipping the color - the buttons are now just black - he shaved
Townley is well positioned to play these games. He came to
While no one anticipated the current crisis, there are some techniques that help keep products and profits flowing. Take the punctured pallet. One task assigned to T2M's factory monitor Feng is to photograph every pallet before it's loaded into a container in
In this case, the container was pulled for a spot Customs inspection in
"On this occasion, the damage was limited to two cases. So we're in the
(Reporting by Timothy Aeppel in