Toy industry faces global supply snags

Shop early for Christmas, insiders advise, to skirt 'catastrophic' logistics disruptions

Shop early for toys or children risk not receiving the Christmas gifts they want, toy industry experts are warning as retailers' orders surge before the holiday shopping season in the United States. Those orders in turn are further disrupting a supply chain gripped by ocean freight bottlenecks and higher shipping costs.

"The supply chain disruption we are dealing with is catastrophic across every consumer category," said Steve Pasierb, president and chief executive of the Toy Association.

"Not only will shoppers undoubtedly and unfairly see price increases－they may not even be able to find the products they are looking for in the weeks and months ahead."

The COVID-19 pandemic halted production early last year as countries locked down to contain the virus. But online sales soared as more people switched to internet shopping, leading to a backlog in the global supply chain that has caused shipping delays from China, where most toys sold in the US are made.

Many companies were swamped with orders fanned by pent-up consumer demand, especially as vaccines were administered and economies gradually recovered.

"The record volume of cargoes is driven by a surge in imports," said Mario Cordero, the executive director of the Port of Long Beach, California.

"Consumer spending started increasing in 2020. Lately it has slowed down by a bit. Still, home exercise equipment, new appliances and other goods are in high demand."

The Long Beach port authority is one of many around the country dealing with an influx of container ships resulting from the high demand.

On Thursday 113 ships were in West Coast ports, seven more than the day before, the Marine Exchange of Southern California said. Fifty-three ships were at anchor and waiting for a spot to unload at the ports of Los Angeles and Long Beach.

"The whole point is we are trying to move these cargoes as fast as we can," Cordero said, adding that terminal operators at the port have extended their gate hours to move the cargo more efficiently.

The container ship jam is just one of the issues causing concerns for the toy companies and other US manufacturers. Many are also dealing with increased container shipping rates.

The spot price per container on the China to the US West Coast route is a little below $20,000, compared with a little above $3,000 a year ago, the freight-tracking firm Freightos said.

On the other hand, last week the price per container on the China-US East coast route was $20,804, more than five times what it was a year ago, the company said.

The surge in shipping rates is the result of supply chain disruption as retailers and manufacturers raced to restock inventories depleted during the pandemic, shipping experts said.

"Hundreds of small- and mid-size companies are still recovering from the pandemic," Pasierb said. "Their hopes are pinned on a successful holiday season, yet their products might not arrive on time, or at a final cost that makes the effort worthwhile."