Rising demand for toys before Christmas tests U.S. supply chain: The Tribune India
With toy demand at an all-time high, US suppliers and retailers are rushing to get past the harsh grunts of air, sea and land transportation so that Santa has a mountain of dolls, scooters and video game consoles to deliver. at Christmas.
The holidays represent a significant portion of the toy industry’s nearly $ 33 billion annual sales, and LEGO blocks, MGA Entertainment’s LOL Surprise dolls, Mattel’s Barbies, and Sony’s PlayStation game consoles were among the best sales last year.
Logistics problems could lead to empty-handed consumers and lost sales for retailers like Walmart and Target – where Reuters and analysts this year found shelf gaps among seasonal items, school supplies and bags. back to Halloween sets and costumes.
Reuters spoke to six major toy makers – including MGA, Kids2 and Funko Inc – who said they use expensive cargo planes, route shipments to new seaports and ask retailers like Target to do their bidding. own shipments.
In the first seven months of 2021, U.S. imports of dolls, toys and games – a key slice of the toy market – averaged $ 1.88 billion per month, up 50% from the same period in 2019, said Jason Miller, associate professor of supply chain. management at Michigan State University’s Eli Broad College of Business.
Miller, who has checked imports since 2002, said the first seven months of 2021 were a record.
âThe demand is greater than what we can supply,â said Isaac Larian, CEO of California-based MGA, referring to retail orders.
Walmart and Target, which leased their own ships in the rush to secure goods, did not comment on holiday toy stocks.
Macy’s said in August it would open Toys ‘R’ Us sections in more than 400 of its stores next year, hoping to tap into the nostalgia associated with what was America’s largest toy chain for decades before closing in 2018. The company, which has already started selling toys online under the Toys’R’Us brand, placed toy orders up to three months earlier than usual said Stephen Moore, a department store executive.
“YOU NEED A MIRACLE”
Mattel Inc warned in July that its supplies were cut off when temporary closures of COVID-19-related ports and factories in Asia exacerbated shortages of shipping containers. The company has not commented on this story.
MGA is one of several toy vendors offering products to overcome ocean delays that can range from days to months.
For the first seven months of this year, the tonnage of toys imported to the United States by air was more than twice what it was for the same period in 2019, said Frederic Horst, managing director of Cargo Facts. Consulting in Australia.
Much of that gain was fueled by the expensive video game consoles the data showed, signaling another year of buyers battling for Microsoft’s PlayStation and Xboxes.
With most of the planes we talk about, the demand for air charter is at an unprecedented level, said Neel Jones Shah, global head of air cargo at Flexport. He said one-way charter flights now cost between $ 1.2 million and $ 1.5 million, compared to over $ 500,000 normally.
âThere’s no more capacity, it would take almost a miracle for you to find a charter by the end of November, beginning of December,â Jones Shah said.
Planes can’t easily supplant freighters which can carry thousands of containers at a time, so toy makers are tweaking their shipping strategies to navigate global traffic jams.
Kids2, the Baby Einstein toy maker, has expanded its seaports from two to nine. It also added seven forwarders in the Far East. The addition of these forwarders, who organize shipping for companies, increased production by 30%.
‘PROBLEM ON PROBLEM ON PROBLEM’
With the rise of holiday toys, the supplier LEGO has stated that it “does not experience any significant disruption in the overall supply of our products or raw materials and is able to meet demand” because its factories and distribution centers are close to its markets.
While stores currently have stocks of ‘healthy’ toys, that could change as Christmas approaches and shipping disruptions ranging from COVID-19 to cascading overbooked freighters, said Ed Desmond, executive vice president of the External Affairs of the Toy Association.
âWe just don’t know what’s going to happen down the road,â Desmond said as toy companies cascaded over shipping.
âWe’ve had several containers in Asia, the factories are backed up – it’s just problem after problem after problem,” said Ryan Gunnigle, CEO of Kids2.
Funko has declared 70% of its Pop! the products are made in Vietnam – where COVID-19 lockdowns hit port operations – so it sends toys to be picked up in China by customers like Amazon and Walmart.
Demand for Funko’s holiday products – including bobblehead figures like Jack Skellington from The Nightmare Before Christmas and a Minnie Mouse with a Santa hat – is at an all-time high, while supply has never was also limited, said new CEO Andrew Perlmutter, who expected the company to sell some products starting in November.
The problem is even worse for Manhattan Toys, which sells stuffed animals and other items at Walmart, Target and other stores.
âWe’re a small business so even if we are lucky on a ship they push us around – we try to adapt to that by paying between five and 10 times as much for a container,â said Nora O’Leary, Manhattan. CEO of toys.
âThe whole system has to scale and it’s hard to do,â said Rick Woldenberg, CEO of Illinois-based toy maker Learning Resources. “Christmas cannot be delayed.” Reuters