In February, U.S. Customs and Border Protection (CBP) gave notice that it had started detaining PVC (polyvinyl chloride) shipments under the Uyghur Forced Labor Prevention Act (UFLPA), a law enacted in 2022 that bans the importation of goods made in whole, or in part, in China’s Xinjiang region under the presumption they were produced using forced labor.
This was a major development for the flooring industry as an estimated 10% of the world’s PVC originates from the Xinjiang region—and all of Xinjiang’s PVC facilities have documented ties to the region’s labor transfer programs, according to CBP.
Customs’ PVC crackdown has impacted virtually all suppliers of luxury vinyl flooring, which, in turn, is having a cascading effect on businesses downstream. Those hoping for a quick resolution to this supply chain obstacle are going to have to wait a bit longer, according to industry observers.
“Nothing has really changed in that what was being held in detention is still being held with what appears little chance of being released,” said Jeff Striegel, president of top 20-distributor Elias Wilf, who has closely followed UFLPA. “In fact, we’ve heard several manufacturers have returned a lot of what was being detained back to the vendors in Vietnam and China as the storage cost was mounting quickly—and in substantial amounts. The only other thing we’ve recently picked up is that U.S. Customs has added new additional suppliers to be detained.”
Retailer response
Six months after the PVC crackdown was announced, flooring retailers told Floor Covering News they are feeling the impact to varying degrees. In some instances, they have had copious amounts of inventory to carry them through this ordeal; however, others are pivoting to alternative hard surface products to offer their customers.
The bottleneck created by UFLPA has stopped some retailers from showing some of their best-selling LVP/LVT. “I have resorted to posting Floor Covering News stories [about UFLPA] on our LVT/LVP displays to help us explain [to customers] the reason some of the best visuals simply cannot be had at this time,” said John Bretzloff, manager of Barefoot Flooring in Castle Hayne, N.C. “Most customers are unfazed by it and move on to the next display. The vendors themselvesimplore us to show those highlighted products that are still available.”
For Bruce Odette, president of Carpet Exchange, which operates 17 retail stores in the Denver market, UFLPA has negatively impacted sales in the LVP category. “There has been a continued supply chain issue on the premium products,” he told Floor Covering News. “This is causing some of the customers to downgrade products that they may have been willing to purchase at a higher priced option. The result is less gross profit dollars at the end of the day. We upped our inventory position significantly to offset delays for our customers.”
That strategy of increasing inventory positions has worked for other dealers as well. “Although there are roadblocks to UFLPA, we have adjusted our inventories as well as our featured offerings,” said Steve Weisberg, president of Allentown, Pa.-based Crest Flooring. “We are promoting what we have and being more aggressive than normal.”
Some retailers say the shortage has disappointed customers who had their sights set on a particular SPC or WPC product. In the case of Grigsby’s Carpet Tile & Hardwood, the Tulsa, Okla.-based business has been able to switch its customers to other products seamlessly. As Penny Carnino, COO at Grigsby’s, noted, “Keeping some popular choices in stock at great values has made a big difference in keeping our customers happy.”
Craig Phillips, president of Flooring Edge, with three retail business in Ohio, said the LVP shortages are noticeable. “We have seen lengthy back-order times when recently checking availability. In some cases, we have been forced to change specs/products for some of our projects.”
Retailers who have weathered a crisis or two over the years are not overly concerned about UFLPA just yet. A case in point is Dillabaugh’s Flooring America, Boise, Idaho. “We haven’t encountered too many roadblocks that can’t be overcome,” said Casey Dillabaugh, president/owner. “The UFLPA has hurt suppliers more than it has retailers. We have the ability to simply reselect with a consumer. Confidence in the supply chain isn’t a blanket concern; it’s mostly tied to select suppliers.”
Since the UFLPA only applies to U.S.-based retailers, Canadian dealers like Sarmazian Brothers Flooring in Cambridge, Ontario, have less to worry about—although they are not completely immune. As Raffi Sarmazian, co-owner, explained, “The LVP shortages are affecting some of our U.S. suppliers; the good news is that suppliers are sitting on lots of inventory and prices are coming down.”
