Santa looks back fondly on the days when his biggest problem was fog and Rudolph, with his glowing nose, to guide the loaded sleigh through the soup.
But the 2021 holiday season could have thick supply problems that hamper stocking shelves at brick-and-mortar retailers and online retailers.
Several have been creating supply-chain tangles throughout the year. With many consumers still stuck at home and spending far fewer dollars on eating out, travel and other activities, they chose and they are choosing to buy goods. Many companies didn’t anticipate this earlier in the year and they cut back on their inventory. They are still playing inventory catch-up from the last nine to 16 months.
Many factories have had significant COVID-19 shutdowns or slowdowns – further hampering the manufacturing and delivering of goods. In the spring, the container ship the Ever Green blocked the Suez Canal for six days. It blocked the flow of hundreds of container ships and billions of dollars of shipments. The Ever Green disrupted supply chains all over the world.
A recent COVID-19 outbreak at the Yantian container port in China has reduced its shipping capacity to 30% – and there is no end in sight until the spread of COVID at the port stops. Yantian handles 50% more freight than the Port of Los Angeles – the busiest port in the U.S.
These delays are causing transportation price spikes. The average price to ship a 40-foot container overseas hit $9,330 at the end of July, which is 368% higher than a year ago, according to Drewery Shipping Consultants. And the cost of transporting goods by truck is up about 15% more than a year ago, according to the Labor Department.
In May, only about 39% of container ships around the world were on time, compared to 75% in May 2020 and 80% in May 2019, according to Sea-Intelligence.
Additionally, the demand for electronic products increased dramatically during the pandemic, leading to a shortage of computer chips for cars, smartphones, consoles, TVs, laptops and most any other product that has an electronic chip.
When you add up all these shutdowns, delays and the added uncertainty of the COVID-19, it’s not hard to image that some retailers may find themselves with supply issues for Christmas 2021.
For the average retailer, a major chunk of their yearly sales come during the holiday season. Hot Christmas toys that arrive in January have significantly less value for both retailers and consumers. The best advice for holiday shoppers is simple: buy gifts in advance to help ensure you have them for the holidays.
This is especially true for electronics. Electronic supplies have been hit with at least two major issues: shipping bottlenecks and a chip shortage. If you can find what you want now, buy it.
An added benefit: having much of your shopping done in September will allow you to be able to shop more leisurely for winter-specific items that may only arrive in October, November or December.
Christmas tree problems – again?
Last year, because of COVID-19, there was a Christmas tree shortage. Right now there are at least three unknowns:
- Will there be enough workers to cut down trees?
- Will there be enough truck drivers to drive trees to lots?
- And will the costs of trucking trees increase significantly?
Unfortunately, you can’t buy Christmas trees in September. The best advice is to keep an eye on when tree lots open and try to buy as soon as they open. Or, visit a local Christmas tree farm and cut down one of their trees. Many farms grow and sell their own trees.
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