By Nick Lung

Shipping a container from Asia to the U.S. typically costs around $1,000 to $2,000 on the spot market. That's a bargain for the furniture industry, which over the past few decades has increasingly relied on factories in Asia for everything from mattresses to dining tables.

After the outbreak of the epidemic at the end of 2020. The cost of the container skyrocketed like a stock, with the spot price eventually reaching ten times its cost. At its peak in early September 2021, it cost more than $20,000 to move a single container on the spot market from Asia to North America's west coast. Two years ago, before the coronavirus outbreak, the same cost was less than $1,600. The problem facing furniture manufacturers is that material costs remain high. Labor has also become more expensive because of the pandemic. With the decline in demand, furniture brands have also had to significantly lower their prices. Other industries, from food to airlines, are expected to see higher profits in 2022. They cost more than they have in years past, but costs are starting to come down.

Not so in the furniture industry. The cost of imported furniture has become unaffordable. Brands were caught off guard by the sudden rise in costs, including shipping and materials. A key reason for the uptick in furniture sales is people buying new homes or even building homes. Such sales dwindle sharply in early 2022 as the Federal Reserve begins raising interest rates to fight inflation.

Plunging demand put an end to a boom in the furniture industry -- and with it the huge hangover of excess inventory. Americans seem to be ordering more and more. But at the beginning of 2022, they almost stopped abruptly. And there seems to be no end to it, which also leaves the furniture industry with ridiculous levels of inventory. That inventory, which could be sitting in warehouses or left in containers in a Chicago rail yard or a dock in Los Angeles, costs money for all that inventory, dragging down furniture industry profits through 2022.

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