Coronavirus shipping disruptions vex Largo importer. He’s not alone.

Higher costs from tariffs on Chinese goods led Ben Walker to add debt, raise prices, cut costs and lay off employees. He hopes not to do that again.
Buyer's Point owner Ben Walker is coping with shortages and delays as a result of production and shipping disruptions that the new coronavirus has caused for his supplier in Shenzhen, China.
Buyer's Point owner Ben Walker is coping with shortages and delays as a result of production and shipping disruptions that the new coronavirus has caused for his supplier in Shenzhen, China. [ SCOTT KEELER | TAMPA BAY TIMES ]
Published March 12, 2020

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• • •

LARGO — If you’ve had a new TV mounted on the wall in the last five years, there’s a one in three chance that Ben Walker supplied some of the components for the job.

Walker, 33, owns Buyer’s Point, a Largo-based company that sells wall mounts and plates for video, audio and low-voltage wiring projects — “pretty much any kind of electrical equipment that won’t shock you." With three full-time employees, two part-timers and some freelancers, the business had $1.1 million in sales last year.

This year, Buyer’s Point has become a case study in the ways that the mushrooming coronavirus pandemic is creating havoc and doubt for many small businesses that rely on imports. Entrepreneurs like Walker already have contended with additional costs imposed by the Trump administration’s tariffs. Now they worry about absorbing another hit from a health crisis that is creating a global economic crisis.

In Walker’s case, that means coping with shortages and shipping delays because of the spreading coronavirus pandemic. He has found no reasonably priced domestic suppliers for the 80 different products he carries, so he relies on a factory in Shenzhen, China that has relationships with several other factories.

The problem is, the health care crisis led Chinese officials to shut down those factories for weeks beyond the usual holiday break that Chinese industry takes to celebrate the Lunar New Year.

Related: Coronavirus business disruptions hit companies like Jabil, and increase Florida's chance of a recession

“It hit at a really critical time of year,” Walker said in his bare-bones office in a corporate park near Ulmerton and Starkey roads. “You’re looking at a month and a half or two months of inventory that’s supposed to be here but that’s now going to be late.”

Because of that, Buyer’s Point sold out of several of its top-selling items. On top of that, some of its clients made unusually large orders, depleting his inventory, when word of the new strain of coronavirus first broke in January. One client who typically buys 100 units a month ordered 1,200 in January.

Despite that spike in demand, Walker said his competitors weren’t raising their prices, so he didn’t, either.

By the first week of March, Chinese workers were able to return to their dormitories at the factory — it is not uncommon for Chinese factory workers to live near their workplace — but Walker’s factory representative told him they still had to remain in quarantine for two weeks before they could go back to work. She also has told him that the factory is expected to be back up to full capacity by the middle of this month, though he’s wondering if it really will take until the end of the month. And she recently mailed him a box of samples, plus 20 pink face masks from the factory’s supply.

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“She was like, look, we’re in this together,” Walker said.

Buyer's Point owner Ben Walker removes pink face masks from a box recently sent to him with some samples by his Chinese supplier. "She was like, look, we're in this together," he said. RICHARD DANIELSON  |  Times
Buyer's Point owner Ben Walker removes pink face masks from a box recently sent to him with some samples by his Chinese supplier. "She was like, look, we're in this together," he said. RICHARD DANIELSON | Times [ Richard Danielson ]

• • •

So how many Ben Walkers are there out there?

“There’s a lot,” said Olga Pina, a Tampa international trade attorney who works with Walker through the Tampa Bay Chamber of Commerce’s minority business accelerator program. In the greater Tampa Bay area, “I would not say there’s just dozens. I would say there’s hundreds.

“A lot of these people aren’t hitting the press,” she said. “They’re small businesses. Unless you work with them, or they’re your neighbor and you know they’re having a hard time ... you might not know they’re being affected, because people tend to look at the big companies.”

At BlueGrace Logistics, a Riverview-based company that books trucks to make thousands of deliveries a day for shippers nationwide, clients are increasingly concerned about supply shortages and other problems moving goods that they either sell or need.

“We were talking about it every couple of days," BlueGrace founder and chief executive officer Bobby Harris said. "Now we’re talking about it every couple of hours.”

Related: Coronavirus has everyone from Outback to Uber talking about paid sick leave

This week, the Institute for Supply Management, an industry group based in Tempe, Ariz., reported that coronavirus-related transportation restrictions had caused supply chain disruptions for nearly 75 percent of the companies it surveyed.

What’s more, nearly 80 percent of the companies surveyed believed the pandemic would affect their business, and one in six had lowered their revenue targets by an average of 5.6 percent.

“The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak,” institute chief executive officer Thomas W. Derry said in an announcement of the survey results. "For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled.”

That’s a problem Walker knows first-hand. He’s already gotten notices from his shipping brokers asking for estimates of how much shipping capacity he needs because cargo space on ships out of Asia is being snapped up fast. So even if manufacturing comes back fully, there still could be delays moving the freight by sea.

Ben Walker, founder and president of Buyer's Point in Largo.
Ben Walker, founder and president of Buyer's Point in Largo. [ SCOTT KEELER | TAMPA BAY TIMES ]

“We’re being told that March has already been completely sold,” he said during an interview on March 5. “So if you’re looking to ship something, you need to be looking at April and beyond.”

Typically, Walker’s regular shipments arrive in two parts. A first smaller batch of products arrives by air. The rest comes later by ship.

Walker got a partial shipment of about 250 boxes by air on March 3. Had he not received that air shipment, he said he probably would have had to lay someone off because he wouldn’t have been able to make payroll.

But the follow-on bulk of his goods — typically anywhere from another 450 to 700 boxes, which he would normally expect in April — likely won’t arrive by sea until later.

“I think optimistically, May,” he said. “I think realistically, June.”

• • •

A graduate of Texas Tech and the business school at Oklahoma State, Walker founded Buyer’s Point in his early 20s while continuing to work full-time as a financial analyst in the credit department at the Hilti tool company. After building up the business, he left the first job and in 2016 moved to the Tampa Bay area for the weather, the proximity to the water, the younger feel to the place and the cost of living.

Buyer’s Point sells its products online, through its own web site as well as through Walmart and Amazon. About 85 percent of its sales go to North America, but only 10 percent remain in Florida.

Going into this year, Walker was projecting that his revenues would grow to $1.4 million.

And now?

“I don’t know for sure, but I wouldn’t be surprised if we saw a $50,000 to $100,000 impact there,” he said.

Whatever it is, Walker is no stranger to business turbulence caused by changes in international trade. In 2018, he paid import duties of $30,000 for the goods he brought in from China. In 2019, those jumped to $100,000 as a result of increased tariffs the Trump administration put on Chinese imports.

Related: Tampa Bay and Florida businesses expect tariffs to drive prices up

“Crippling,” Walker said of their effect. “I wish people understood more how the tariffs work. ... To be clear: me, as a business in the U.S., I pay for those tariffs. The minute it hits the port, they are expecting a cash payment for the duties and those tariffs. We have to pay that same day, and every day we don’t pay, we are hit with a fine.”

Walker had to pass some of those additional costs on to consumers, which cost him some sales. He also reduced his marketing costs, laid off one full-time and one part-time employee, and took on debt. He won’t say how much, but acknowledges it was more than six figures worth.

Now, with the new coronavirus making the future uncertain, he hopes to avoid those kinds of steps again.

“I’ve been losing hair in my beard here," he said. “It’s been stressful. Very stressful.”

Tampa Bay Times coronavirus guide

Q&A: The latest and all your questions answered.

PROTECT YOURSELF: Household cleaners can kill the virus on most surfaces, including your phone screen.

BE PREPARED: Guidelines for essentials to keep in your home should you have to stay inside.

FACE MASKS: They offer some protection, but studies debate their effectiveness.

WORKPLACE RISK: A list of five things employers could be doing to help curb the spread of the disease.

READER BEWARE: Look out for bad information as false claims are spreading online.

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