On the very important routes from East Asia to the west coast of North America, the industry standard Freightos Baltos index reported that container spot prices exceeded $ 20,000 in September. before dropping to over $ 14,000 in early December – again, up over 300% from December 2020.
It’s not that price matters to avid product retailers this late in the game.
“If your product hasn’t been unloaded, you won’t get it in time for Christmas,” said Richard Gottlieb, longtime industry observer, of Global Toy Experts in New York City. Plastics News End of november.
Deep pockets have helped the biggest companies weather the logistical storm. Last summer, Walmart Inc., based in Bentonville, Ark. chartered its own vessels to bring the product to market.
“Hasbro, Mattel and Lego have a very complete and very large logistics team,” said Gottlieb. “They also have long-standing relationships with factories and carriers, so they are able to be first served.
“If you’re a small business and you’ve always outsourced your logistics, you’re going to have problems,” he added.
Real-world examples: JAKKS Pacific Inc., based in Santa Monica, Calif., Blamed “logistics challenges” for a 2% drop in net sales year-over-year to $ 237.0 million for the last quarter. ending September 30. But private company Lego A / S of Billund, in Denmark, said its first-half sales rose 46% to 23 billion Danish kroner ($ 3.49 billion) from the same period in 2020.
At Mattel Inc., based in El Segundo, Calif., Year-over-year sales for the same quarter jumped 8% to $ 1.76 billion. Hasbro Inc., based in Pawtucket, RI, saw year-over-year sales for the same quarter jump 11% to $ 1.97 billion.
Hasbro’s good numbers were tempered by news of the death of longtime CEO Brian Goldner on October 12.
None of this makes life easier for smaller players like Pickering. “In the toy business, if you buy enough of it you often get free shipping costs. This year almost every company either stopped it permanently or added a 10 or 20 percent freight surcharge,” he said. he declared.
Supply will eventually catch up with demand, predicts Gottlieb. “Ships and containers are being built. We will have a glut that will drive prices down. But it will take several years. “
The challenges of the supply chain barely end once this container is unloaded. Labor shortages, including the shortage of truck drivers, have created one-time shortages even within large chains, Zahn said.
“Shipping to different parts of the country has varied. In theory, the West Coast stores got most of the product, but not anymore. [the] East Coast before one of them was delivered all over the West Coast, ”Zahn said.
“I might find well-stocked Walmart and Targets near my home in northern Illinois, while my coworkers can go to New York area stores and that’s a whole different story,” he said. he declares.
Global Toy Source and The toy book responded to these challenges by providing online lists of manufacturers with national stocks available and ready to ship.
“It’s really in response to people who have extra shelves and need merchandise,” said Gottlieb of Global Toy Source’s Toy Matchmaker department.