Dive Brief:
- Bassett Furniture expects the impacts of Hurricane Helene and the International Longshoremen Association’s East and Gulf Coast port strike to “have a bearing” on its Q4 results, according to a Q3 2024 earnings call.
- The storm shut down one of Bassett’s distribution centers in Catawba County, North Carolina, for two days during the first week of October, CEO Rob Spilman told analysts. The CEO added that the strike pushed shipments back by one to two weeks.
- “We've recovered as quickly as possible to get shipments back on track,” Spilman said, noting that storm damage to Interstate 40, the furniture retailer and manufacturer’s main route to the west, will have a larger longer-term impact on its logistics and distribution systems.
Dive Insight:
Extreme weather events and labor unrest have created a season of supply chain disruptions, impeding or even halting operations up and down the East and Gulf Coasts.
Hurricane Helene killed more than 200 people and uprooted roads and infrastructure across the Southeast, leading parcel carriers like FedEx and UPS to suspend or delay deliveries in some areas, among other disruptions.
Less than two weeks later, Hurricane Milton battered Florida, closing ports, flooding trucking routes and interrupting deliveries.
Meanwhile, although the ILA strike lasted only three days, its impact to supply chains is still being felt, leaving shippers to contend with cargo backlogs and freight constraints.
These recent events, however, are not the first supply chain disruptions Bassett has endured this year.
In July, a cyberattack led the company to suspend some of its manufacturing operations.
Bassett CFO Mike Daniel confirmed during the Q3 earnings call that the shutdown lasted for one week. Daniel noted that no consumer information was compromised and that the company was able to recover all data and resume full operations within two weeks of the attack. However, the CFO estimated the incident led to a loss of between $1 million and $2 million.
“So the efficiency in the pipeline and getting these loads built back and filling the trucks and getting them out there definitely affected our July and into August,” Spilman added, noting that the company operates a captive distribution center.
While navigating multiple supply chain disruptions, Bassett is undergoing a restructuring plan announced in July. The plan includes an ongoing consolidation of its manufacturing footprint and the exit of a West Coast wholesale distribution center, a move the company completed during Q3. Spilman said moving out of the facility resulted in a $1.2 million charge.
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