PHOENIX - A Phoenix-area brewing company had to spend an extra $12,000 to ship one large, very important item that was already delayed for months. Unfortunately, that’s the reality for many small businesses facing supply chain issues.
PHX Beer Co. needs to make more beer to keep its shelves stocked.
"I wish they were able to tie it into a speed boat and jet it over here, but, not possible," said Adam Wojcik with PHX Beer Co. He ordered the major piece of brewing equipment a year ago as sales started increasing.
But, the global supply chain issues crushed them, taking more than a year and quintupling the shipping costs overseas.
"We were expecting maybe a $3,000 shipping bill on this from China to LA to us," Wojcik said. "Ended up being over $15,000 in shipping."
He said the additional costs came as a major surprise.
"It’s big time dollars. We’re a new brewery, so we’re just trying to get back to even and start working our way up. It’s definitely a big shock," Wojcik said.
Small and medium businesses are getting hit harder, says Hitendra Chaturvedi, professor at the W. P. Carey School of Business at Arizona State.
He's a supply chain expert and says there’s no light at the end of the tunnel, but large companies can handle it better.
"With their deep pockets they can charter a ship to bring their products all the way from Asia to the U.S., but what would a small business do? They end up having to pay very high prices," Chaturvedi said.
The cost to install this new tank for PHX Beer Co. also doubled from $5,000 to $10,000. It’s a lot of money, but the biggest fear was losing business because they couldn’t keep shelves stocked.
"If you’re out another week at a grocery store, they’re like, that was your last chance, you’re out … So as soon as they get this plumbed in, the better," Wojcik said.
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