Parents with young children would be well-served to order toys early this year because congested container ports and other shipping delays could leave stores with shelves empty. Retail and logistics experts agree that children’s toys are expected to become scarce and more expensive in the coming months.
“This is because of the historic strains on capacity among container shipping lines, but more importantly port infrastructure and inland distribution networks. Many importers have responded by ordering extra merchandise and trying to arrange earlier deliveries, which have only exacerbated the situation,” Harvard Business School Prof. Willy Shih reportedly said. “We will see shortages and higher freight costs, likely reflected in significant price inflation, across a wide range of sectors. Toys will be no exception.”
Recent reports indicate that an unprecedented number of cargo ships suffer lengthy delays getting into major ports such as Los Angeles and Long Beach. As many as 60 ships were recently anchored off the coast, waiting for an opportunity to dock and unload. But heightened import volume coupled with significant supply chain struggles appears to be growing worse with the holiday season fast approaching.
“The normal number of container ships at anchor is between zero and one,” Kip Louttit, executive director of the Marine Exchange of Southern California, reportedly said.
Wait times recently exceeded eight days, and shipping rates between the U.S. and Chinese manufacturers exploded by upwards of 500 percent in recent months. As a result, industry insiders warn consumers to get far ahead of toy purchases and not to wait for Black Friday discounts.
“I’ve been doing this for 43 years and never seen it this bad. Everything that can go wrong is going wrong at the same time,” MGA Entertainment CEO Isaac Larian reportedly said, one of the world’s largest toymakers. “The demand is going to be there. What is not going to be there is the product to fill the demand. There will be a shortage of toys this fall. It’s going to be a tough year for retailers.”
The MGA CEO is reportedly willing to pay upwards of $20,000 per shipping container despite costs hovering around a modest $2,000 last year. Even paying what many consider a supply chain disruption premium, MGA suffered delays of over six weeks waiting to offload 600 containers at the Port of Los Angeles. The cargo included popular toys such as L.O.L. Surprise dolls, among others.
Restarting the toy-making plants after the height of the pandemic appears to be simpler than transportation logistics. Incidents such as the Suez Canal impediment, foreign plants shutting down due to the Delta variant, logistical chokepoints, labor shortages, and increased transportation costs, have formed something of a perfect storm that could sustain supply chain disruption and delays deep into 2022.
Although parents do not necessarily experience supply chain delays firsthand, many will pay an increased consumer premium for toys as the holidays draw closer.
Sources: ttnews.com, newsweek.com
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