Brian Bonilla was recently riding his handmade titanium bicycle when he spotted dozens of giant cargo ships anchored outside the ports of Los Angeles and Long Beach, waiting for a chance to dock and unload their cargo. Typically, only a handful of ships could be forced to wait like this, or they wouldn’t have to wait at all.
Bonilla works for Cub House, a bicycle shop in San Marino, making sure new bikes are properly adjusted for their riders. He knew that the floating traffic jam was a sign that the Cub House and every other American bicycle store could wait a long time for the merchandise they hoped to sell for the holidays.
“What we’re trying to prepare at the store right now is Christmas time,” Bonilla said. “Usually during the Christmas season the kids ‘bikes are basically selling themselves, but right now we’re trying to figure out how we’re going to make the kids’ bikes available to us. “
Although it is only September, it is the most important shipping season for products destined for American merchant holiday shopping displays – toys, electronics, sporting goods and ugly Christmas sweaters.
Normally, the global supply chain for the international movement of goods is like a switch on a wall: it works. The products that consumers want are available. No one thinks about how. No one thinks about the switch until it stops working.
And right now, the global supply chain is not functioning. It has been scolded by a multitude of factors: the pandemic, surging consumer demand, unleashed storms, shortages of freighters and containers as well as the lack of people willing to drive trucks or stock shelves in warehouses and retail stores for the wages offered.
This has led to an unusual sense of urgency for this time of year. A number of leaders with very diverse economic expertise have a message for consumers:
- Start your holiday shopping now. In these times of traditional surge in purchases, when the weather gets a little colder, it may be too late as retailers’ stocks will be limited.
- Be prepared to accept your second or even third choice. Look for local or American items. Make your own gifts.
- If you wait, be prepared to wait again: some products originally slated for the holiday season are unlikely to arrive until 2022.
“There is no certainty that if your child or the American children are looking for a particular toy, it will be there,” said Ed Desmond, executive vice president of Toy Assn. commercial group, said Wednesday at a press conference hosted by the Port of Los Angeles. “What we could see is a lack of variety.”
Stuck at home and flush with stimulus payments, American consumers started enthusiastically spending last year and haven’t stopped. There were plenty of shipping nightmares this past holiday season, and experts fear it will repeat itself this year.
In June, the National Retail Trade Federation increased its estimate for 2021 retail sales, predicting 10.5% to 13.5% growth, to over $ 4.44 trillion, in 2021. This was significantly higher than the 6.5% to 8.2% growth that the trade group scheduled for February.
Even the ports of Los Angeles and Long Beach, which are the fastest port complex in the United States and move more cargo in a month than many ports handle all year round, cannot operate fast enough. . Neighboring ports, which last year processed nearly a third of products imported from the United States, carry a record number of steel freight containers, most of them from China and other Asian countries.
“We are entering the full peak season,” said Gene Seroka, executive director of the nation’s largest seaport, the Port of Los Angeles. “Every node in this supply chain is maxed out. “
According to the Marine Exchange Vessel Traffic Service, a record 89 cargo ships were anchored or drifting offshore Thursday afternoon, waiting to enter the ports of Los Angeles and Long Beach to be unloaded.
Seroka described freight containers stacked on the docks by the thousands, waiting for a ride on the short rail line in the ports that takes the steel crates on their next transcontinental train journey. Others are trucked to warehouses before heading to retail shelves.
But railways are also reporting backlogs, which add to product delays, and trucking companies say they don’t have enough drivers. Warehouses and retailers also complain that they cannot recruit enough workers.
Some items are slower to enter the transportation network as the pandemic has disrupted the operations of some Asian factories and seaports. In June, a COVID-19 outbreak closed part of the Yantian port in China, one of the busiest in the world. It has since reopened.
And when the items arrive at the docks, there aren’t enough freighters or containers because companies put the ships on hold last year to save money at the start of the pandemic shutdown when consumers weren’t spending, said Keith Jelinek, managing director of global consulting firm Berkeley Research Group in Emeryville, Calif.
“Now that we have a lot of demand, we have fewer ships,” he said.
This means that shipping prices have skyrocketed. The price to move a freight container across the Pacific Ocean is now around $ 10,000 to $ 15,000, down from $ 2,700 to $ 2,900 a year ago, Jelinek said.
These costs have helped fuel the rise in consumer prices.
The Ministry of Labor said in August that consumer prices jumped 0.5% June to July, the smallest increase since February. Prices jumped 5.4% from a year earlier.
As the movement of goods is blocked by problems with ships, ports, trucks and rails, the effects will vary across the country, said James Zahn, associate editor of the Toy Book, a leading trade publication. for the toy industry.
“It’s something that we haven’t really seen in the toy industry before, and it’s regional blackouts on specific items,” Zahn said. “Something can be abundant in a state or even a city; in the next, the shelves are completely bare because of the way it’s filtered through this strange cycle of distribution.
“As a father of two little girls, I know what it’s like to run after things. If you go to Amazon, you will start to notice that the delivery dates are actually longer than they usually are. So shop early, yes.
“You have to visit independent toy stores that are staffed with people who actually know toys. And if we come to a point where something hot may run out, these people can easily recommend another great toy for kids that you are looking for.
At Cub House, supply shortages prompted owners Sean Talkington and Carla Alcibar to launch the store’s own brand, called Beach Club. Store staff built 45 bikes using some of the latest deliveries of parts and components received before the pandemic.
The problem comes back, however, when their current offering sells out.