Supply chain disruptions are threatening to put a damper on holiday gift giving
You may wind up having more space under your Christmas tree this holiday season. And, no, it won’t be because Santa forgot to come. His sleigh could be stuck in traffic, however.
Supply chains around the globe have been met with near constant disruption since the start of the COVID-19 pandemic, and those disturbances are now threatening to derail holiday shopping plans.
With the holidays right around the corner, supply chains are buckling in the midst of record-breaking backlogs, longer than normal shipping times, limited inventory, and lingering worker shortages.
Government shutdowns, mandates, and COVID-19 restrictions have forced manufacturers, suppliers, and everyone in between to rethink how they do business.
Not helping matters, demand, as it often does this time of year, is soaring upwards; but supply, well, not so much.
Item shortages have, of course, been a near constant since the start of the COVID-19 pandemic, but could anyone have known that toilet paper would only be the tip of the iceberg?
Whether your item is shipped by air, freight, ocean, or train, you could end up waiting a lot longer this year for that perfect gift. If it even exists, that is.
Nike has already come out and said it won’t have enough sneakers to satisfy demand this holiday season, while those hoping to finally get their hands on an elusive PlayStation 5 might not want to hold their breath.
Stuck in Traffic
A major part of the problem is a historic backlog of maritime container ships, which is disrupting an industry absolutely critical to the global shipment of products and supplies.
Maria Cordero, director of the Port of Long Beach on the California coast near where more than 60 ships were forced to sit for days and weeks this fall, said in September that the industry was in bad shape.
“The supply chain is definitely disrupted and has been for some time,” Cordero told Fox Business. “The situation is in a crisis mode.”
Crisis may have been an understatement. Businesses trying to move all sorts of goods and services, from raw materials to electronics, to furniture and auto parts, were forced to endure shortages and long delays.
Companies, such as Costco, Walmart, and Home Depot, even took the unusual step of chartering their own container ships to try to mitigate delays.
The level of congestion at the Port of Long Beach, meanwhile, was unprecedented. At one point the port housed 144 shipping vessels at once, with 66 ships waiting off the California coast for their turn to get in, sometimes for weeks on end.
Prior to the pandemic, the Port of Long Beach typically only had one ship at most waiting to get in, according to Business Insider, which reported that the port responded by transitioning to round-the-clock operating hours.
The Port of Los Angeles, also experiencing record-breaking traffic, decided not to follow suit, with its executive director Gene Seroka telling CNBC it, quite frankly, wouldn’t make a difference.
“We’ve had longshore workers on the job six days a week since the pandemic started, but it’s truck drivers and warehouse workers that we need to bolster,” Seroka said.
Indeed, supply chain issues go well beyond any one area or industry. Worker and material shortages also do not discriminate by land, water, or air.
Transport workers have certainly been dealt a heavy hand by the COVID-19 pandemic. Travel restrictions, quarantines, and vaccine requirements have them stretched thin.
Workers from across the shipping industry came together in September to write an open letter to heads of state attending the United Nations National Assembly, that warned of a “global transport system collapse,” if governments didn’t act to restore the workers’ freedom of movement.
“Transport workers keep the world running and are vital for the free movement of products, including vaccines and PPE, but have been continually failed by governments and taken for granted by their officials,” workers wrote.
The letter was signed by the International Road Transport Union and the International Transport Workers’ Federation on behalf of a total of 65 million transport workers around the globe.
“We are witnessing unprecedented disruptions and global delays and shortages on essential goods including electronics, food, fuel and medical supplies,” the letter states. “Consumer demand is rising and the delays look set to worsen ahead of Christmas and continue into 2022.”
No More Toys
With the shipping industry and supply chains in crisis, procrastinating holiday gift buyers may also have to rethink their plans this year.
Experts had already been warning consumers since the fall about an impending toy shortage, a hard sell for even the most festive and optimistic of kiddos.
“It’s going to be very, very tough to get stuff in this year,” Paul Sahagian, owner of the Learning Express toy store in Needham, Mass., told NBC Boston in September. “The lead times have been six weeks instead of two, there’s some companies that, if you don’t order by a certain date, that’s it.”
Shipping delays, along with material and labor shortages, put the heat on toy companies, manufacturers, and parents looking to score the perfect holiday gift.
“There is going to be a major shortage of toy products this year,” Isaac Larian, the CEO of toy company MGA Entertainment, told CNN in September. “The demand is going to be there. What is not going to be there is the product to fill the demand.”
So, while less-prepared gift givers may have to wait until 2022 to make that extra special purchase, the pandemic has shown we are capable of standing the wait.
But, next year, please Santa, don’t be late.
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