Mexico ‘not as good of a deal’ as it once was, say two furniture suppliers

HIGH POINT – Two case goods suppliers are much less optimistic on Mexico as they once were, with one opting to pause all operations in the country indefinitely.

Legends Furniture and American Woodcrafters both set up sourcing from Mexico for the recent spring High Point Market, at a time when ocean freight rates were still incredibly high. COVID-related disruptions in Asia were still prevalent, and suppliers felt the need to increase their sourcing options.

But as freight rates fell and the pandemic calmed over the ensuing months, the value of Mexico was put into question.

“Mexico is not as good,” Legends Vice President of Sales Tim Donk told Furniture Today. “It’s not as good of a deal. Getting a truck from Mexico to Ohio costs nearly as much as ocean freight.”

There are also problems with trucking, primarily a struggle to find drivers, he said.

Legends doesn’t want to nix Mexico, as Donk says the company remains committed to its blended sourcing strategy, and there are still positives about the region.

“One benefit about Mexico is you don’t have to wait to cut. You don’t have to commit to say, five containers.”

Like Legends, American Woodcrafters was a new arrival to Mexico at the spring market. It introduced Artisan’s Grove, a bedroom, dining and occasional line.

At the time, company CEO Chuck Foster was excited about the expansion, particularly in the line’s finishes.

“Finish is key for us and we really wanted that high-end feel,” Foster had said. “It was a challenge to find a factory in Mexico capable of doing that. But our finishes from Mexico are so nice that I’m like a kid in a candy store.”

But now, as with Legends, Mexico isn’t as good of a deal.

“Mexico is on pause,” Foster told Furniture Today at this week’s market. “It doesn’t represent the value it once did.”

The mid-priced case goods supplier introduced two bedroom collections and one new dining line at the October market. All are sourced from Indonesia, the company’s primary sourcing region.

Foster said freight rates have dipped to about $9,000 for a container. That’s low enough to question Mexico, so much so that the company even opted get rid of its ocean freight surcharge at a loss.

“We’re still carrying high-price inventory,” Foster said. “We’ve discontinued our ocean surcharge, but this is costly for us.”

Still, Foster believes getting rid of the surcharge was necessary to keep retailers coming. “Retailers want an incredible price,” he said. “We want to give it to them.”

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