The LVT category is facing a new crisis, this one emanating from the Uyghur Forced Labor Protection Act (UFLPA), which was passed into law by the U.S. government in 2022. UFLPA prohibits the importation of all goods that are produced in or contain any content from the Uyghur region in China—an area believed to house forced labor operations and is a major supplier of PVC and raw materials to China and the greater Asian region.
To enforce UFLPA, U.S. Customs and Border Patrol (CBP) has begun detaining all imported LVT that could potentially contain materials subject to UFLPA restrictions and is only releasing held shipments after clear and convincing evidence has been produced and confirmed that there is no violation of UFLPA.
Some flooring observers expect the UFLPA detentions to last for at least 30-60 days, perhaps longer. The hope is that once material is released it can be delivered quickly since product is sitting at East Coast ports in Customs. “The ironic part is that most of the larger LVT players have all the necessary documentation showing full chain of custody meeting the requirements, but apparently the issue is lack of readiness by U.S. Customs,” Jeff Striegel, president of top 20 distributor Elias Wilf, told Floor Covering News. “It’s great that our government is addressing the forced labor issue; however, in passing the new law they once again failed to anticipate the unintended consequences of not being ready to administer it.”
As noted, these detentions are industry-wide and most of the major LVT manufacturers/suppliers are experiencing the same detention of their goods. Mannington, as one example, said it has all necessary documentation to provide full chain of custody of all components in Adura, its signature LVT line. However, they still have hundreds of containers detained at U.S Customs pending review.
In its case, Mannington has been extending lead times on residential sourced LVT by an additional 45 days on average. In a letter to customers, Zack Zehner, Mannington president, asked retailers and distributors to work with their Mannington territory manager to identify whether the same visual may be available in an alternative Adura Selling Solution product (such as Adura Max, Adura Rigid, or Adura Flex). He wrote that most Adura Max visuals are available from the Blackwood facility in Calhoun, Ga.
Suppliers are adjusting accordingly. Steve Sieracki, vice president, hard surface, Shaw Industries, said their teams are well equipped to navigate the supply chain challenges. “While we’re not immune to the supply chain disruptions that every industry has faced in the past few years, we use technology and data to quickly adapt and respond to potential disruptions,” he told Floor Covering News.
Observers agree UFLPA is yet another obstacle facing LVT sourced from China and Vietnam, a point of consternation for many industry executives. As Elias Wilf’s Striegel noted, “We’ve seen tariffs, manufacturer backup issues during COVID-19, ships stuck at port back-ups, freight rates going up by 600% and now the newest problem with the new Labor Act. In the end, it will most likely be just another temporary disruption within the category. However, LVT is like the Energizer Bunny that keeps going and going. At some point, the industry really needs to solve the LVT dilemma on a longer-term basis in some fashion.”
Writing on the wall
While many suppliers have moved LVT production stateside, industry observers point out that domestic LVT production can only satisfy a small percentage of the demand for the product. “We have known this to be an issue now for years and our industry has slowly been moving to add stateside production, but we have a long way to go,” said Craig Phillips, president of The Flooring Edge, with three Ohio stores. “Our suppliers with made-in-the-USA products will see greater demand for those products. In addition, I believe laminate, with a good amount of domestic production, has an opportunity to take share.”
Even before the most recent development, some retailers had already cut back on their LVT allotment sourced from Asia, focusing instead on domestic products or changing their stocking strategy. “This Labor Act won’t impact our overall LVT business in the least,” said Kevin Frazier, president of Frazier’s Carpet One Floor & Home, Knoxville, Tenn. “With an eye toward minimizing the impact that vendors’ supply issues have on our business, especially in stocking segments, we have actively been employing an advanced stock purchase system since May of 2020.”
Ted Gregerson, CEO of Ted’s Abbey Flooring, Anniston, Ala., said his store shifted away from LVT because of what he deemed claims issues. “We really started focusing on shifting customers from LVT to quality, 12mm laminate products six to nine months ago. We still sell LVT to customers who come in asking for it, but we only sell the thicker, better-quality LVT products.”
Some distributors have been proactive in their approach to UFLPA long before it became law. In fact, distributor Abraham Linc was working on a resolution for the past year. “Today we exclusively use PVC from regions other than Xinjiang and are optimistic that the government will limit enforcement of this law to companies that continue to use—or have a recent history of using—materials from Xinjiang after the implementation of this law,” explained A.J. Warne, vice president of sales and marketing.