Powell Company says it is leveraging inventory buildup and bi-coastal distribution to manage risk while closely watching container rate volatility.
HIGH POINT — With tariffs and supply chain uncertainties posing a continual challenge to the home furnishings industry, how does a supplier manage to do more than simply tread water? For Powell Company, the answer is by leaning on logistics, infrastructure and longstanding supplier relationships to stay ahead of the curve.
CEO Jim Ziozis said the company’s exposure to Chinese manufacturing has shrunk significantly in recent years, a move that began in the first Trump administration and that has helped mitigate the impact of the recent tariff roller coaster.
“When the tariff conversation began during the first Trump term, we thought the China levies might be temporary, but when Biden extended them, we quickly realized they were here to stay and adjusted our sourcing accordingly,” Ziozs told Furniture Today.
“By the time (High Point) Market started, we were already in that 90-day grace period,” he continued. “But for us, not much has changed because the vast majority of our products — like much of the industry’s — have already moved out of China. We’re barely sourcing 10% from China at this point.”
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Still, Powell isn’t taking anything for granted in the current tariff environment.
“Yes, it’s good that the higher rate dropped temporarily, but let’s not forget the original 25% is still on the books,” Ziozis said. “So while current levies might seem like a bargain compared with 145%, we’re still dealing with a long-term calculation on these costs.”
Global shipping costs have added yet another layer of complexity. “One thing that really changed, and this happened over the last week is the steamship lines,” he said. Acting like the oligopoly they are, they added a $2,000 peak season surcharge,” Ziozis said. “That’s already shifting the economics on larger, high-cube pieces, and it’s something we’re watching closely.”
To prepare for potential disruptions, Powell is taking what Ziozis describes as a “multi-pronged approach.” With company-owned distribution centers on both coasts, the team has been able to time shipments and build up inventory ahead of key deadlines.
“The first step was getting as much product as possible on the water before the first cut-off,” he said. “We focused on our top sellers and added about five extra months of inventory.”
But that kind of planning, he noted, requires more than just foresight. “You need factory capacity, trust with your suppliers, working capital and the logistics to actually pull it off,” Ziozis said. “It’s not just about saying you’ll carry more inventory; you have to be in a position to act on it.”