The scrooge may as well take this year off.
Consumers should anticipate price hikes and significant shortages of toys around the holidays, due to the global and ongoing supply chain disruptions, first ignited at the start of the Covid-19 pandemic. The toy industry remains especially vulnerable since 85% of toys sold in the US are manufactured overseas, according to the Toy Association.
“This is the big one,” Steve Pasierb, president and CEO of the Toy Association, told Cheddar News of the supply chain crisis. “This is the latest and the greatest disruption.”
As a result, toy prices may climb as high as 10 percent around the holidays, Fox News reported.
Massive bottlenecks at ports are to blame. Since the beginning of the pandemic, consumers have been spending less on experiences, and more on actual goods. Demand for toys in ten out of 11 “super” categories increased in the first half of the year, Pasierb told Cheddar News.
But shipping companies can’t keep up with the surge in shopping.
There’s a shortage of shipping containers and prices for these containers have soared. The cost to ship a container from China to the West coast, pre-pandemic, cost about $3,500. Now, it costs more than $20,000. In September, those prices hit a record high.
Even when products make it to the US, they’re getting stuck at the ports, which is seeing an unprecedented logjam of container ships. To help ease the backlog, the Biden administration announced that the port of Los Angeles will expand its hours of operations and remain open 24 hours a day, seven days a week.
But even still, the issue is being compounded by a shortage of qualified truckers to transport products to their destination. The US is currently facing a shortage of about 60,000 truck drivers. Many are leaving the industry due to low pay and difficult work conditions.
Mike Landau, CEO of ParkMyFleet, a mobility company, said short-term fixes aren’t sufficient. The industry needs to reevaluate how it treats workers, and how it can modernize the shipping process.
“Truckers need better compensation and conditions to ease the shortage,” said Landau.”AI and Data should be utilized to be able to predict ebbs and flows in the supply chain.”