Updated: 24th Nov, 2020
Without a doubt 2020 has been a year to forget. As a company, we've had stock troubles all year, and continue to do so.
I'd like to take this opportunity to shed light on some of the main reasons behind the delays, to give everyone some more context and hopefully add some much needed transparency to the situation.
First and foremost we’d like to thank everyone who has placed an order and has been waiting with incredible patience for their gear, often through numerous delay updates from us. I explain below why some of these delay emails come so late.
Some customers who, for whatever reason, couldn’t continue waiting have cancelled their orders. We'd like to take this moment to also acknowledge them for giving us a shot to begin with and we hope that one day you will consider us again.
The intention of this message is not to absolve ourselves of any responsibility, but rather to give you a behind-the-scenes peak of what is happening.
We have heard from customers that the reasons we have been communicating with them don't contain much specific information or are a bit 'lame' and ambiguous. This isn't deliberate on our part. Although I agree that we could do better, the reality is (as explained in some more detail below) that prompt and detailed information has been hard for us to obtain. The situation in the manufacturing & shipping worlds is chaotic at the moment, and the problem is compounded by the fact that we can't just jump on a plane and deal with some problems in person, which we otherwise would have done long ago.
Certainly some of the blame is ours to bear (and we do so forthrightly) but some of it is unfortunately beyond our sphere of influence. For both, I offer my unreserved apology for all inconvenience and frustration.
Early to Mid 2020 - Underestimating demand:
In the first quarter of 2020 we had underestimated the demand our products would generate in the USA and Australia. Although we had been operating in Australia already for over 6 years, the HOTTAP V2 was also a new product in our home country and it had done better than we expected.
We proudly attribute this to producing a great product but it's also undeniable that COVID-19 has had an upwards impact on e-commerce in general, and doubly so in our industry, due to the restrictions on international travel.
Since then we have had made adjustments to our forecasting. Dealing with physical products though, meant that it would take at least 3 months for any corrective actions on our part to materialise.
We feel that we have mostly corrected our forecasting problems, however we haven't had an opportunity to stress-test this because our sales levels have been impacted by not being in stock.
Mid 2020 to Current - Production Issues:
When COVID-19 hit the western world, demand from importers suddenly dropped and many existing orders with their Chinese suppliers were cancelled. China responded by laying off a lot of staff, preparing to weather the storm.
Around July, demand started to dramatically increase from all regions of the world. Anecdotally, we've heard from some of our direct suppliers that in these months they had purchase orders quantities in excess of 200% of their normal monthly amounts, but staff levels remained at less than 50% of their normal levels. They were scrambling to re-hire and train workers as quickly as they could.
Thankfully we work with high-quality suppliers and we've been able to rely and lean on them and their supply-chain to push orders through, and so (overall) we've suffered less than some of our peers. However we are not completely immune - we have already had to delay orders due to not being able to get our hands on some components.
The most recent example is a shortage of propane hose & regulators. This is a component that would normally be in a very 'low risk' category for us; however due to the current situation it has meant we have needed to hold whole shipments of gear as it is indeed a critical component.
This remains a continual risk. We've been delayed, and continue to have some delays due to not being able to get some sub-components ready in time, or in the quantity that we need. We are working with our suppliers on a daily basis to mitigate & plan around issues in this space.
Oct 2020 to Current - Shipping Issues:
The unemployment benefit in the USA and Australia led to a boom in demand and an increase in consumption across the board. This may go some way to explain the demand boom written about in the point above.
Shipping containers started piling up in the US and Europe, but were slower in returning to Asia where coronavirus lockdowns had hurt demand for imported goods.
It's important to note that this includes containers returning to all Asian countries and not just China, as a shortage in countries neighbouring China will quickly lead to shortages inside China.
The scarcity of containers has not only nearly tripled the cost of shipping our goods, but more importantly, it's making it incredibly difficult to simply get our finished goods on a ship and on their way to customers.
Recently, we have experienced a number of shipping bookings which had been cancelled the day before the goods were due to be picked up, because our forwarder literally didn't have a spare container to give us to load our product.
In these situations, all we can do is re-book, which normally means at least another two weeks before another slot becomes available.
This goes some way to explain our unexpected and last-minute delay notifications. We would ideally like to give our customers as much notice as possible. However, the reality we have been facing is that the buffers we include in our estimates are quickly eaten up, and then some, by unforeseen and historically unprecedented causes.
Unfortunately, our troubles don't end there. When we do successfully secure a container, our space on the vessel is also at risk. Much like the airlines, shipping carriers often overbook spots. More than once we have found out only once the container has reached the port that our spot no longer exists.
This is currently causing us the most issues, and is where we have the least leverage available. Currently we have thousands of HOTTAPs ready to be shipped which are waiting in a warehouse (see photos below), with many thousands more to be produced next month.
Thank you for reading this far. I hope this has helped to explain the complexities of the current situation in some more detail. I will keep this page updated as things progress.
I look forward to when things return to normal. Till then I'd like to wish you all safe and happy Christmas season.
Regards,
Mac Slodyczka, Director.
