Whether it's a stuffed animal, Lego set or video game, toys are one of the most popular holiday gifts. They might not be as readily available later this year due to ongoing supply chain issues.
"Our advice to consumers is to get out and buy toys now," said Ed Desmond, executive vice president of the Toy Association in Washington D.C. An industry trade group representing more than 950 companies, its members sell 3 billion toys each year, 85% of which come from China.
While stores right now have a "pretty healthy supply, we don't know what's going to happen as we get closer to Christmas," Desmond said.
The problem is shipping delays. Berth activity at the Port of Los Angeles was up 60% in August compared with pre-pandemic times, Port of LA Executive Director Gene Seroka said Wednesday. And the ships keep on coming. The port is expecting a 5% increase in the number of containers it processes this month compared with last September when a COVID-induced American buying spree first led to increasing cargo volumes at the port.
On June 30, the port hit an all-time record of 10.9 million shipping containers in a single 12-month period — a record it is expecting to break again in 2021, Seroka said.
From ships and trucks to railroads and warehouses, the supply chain is now log jammed, as incoming ships from Asia spend a record six days idling in the water upon arrival before they can be unloaded, only to spend another 8-½ days waiting for available trucks and warehouse space. Seroka said the number of containers waiting to be loaded on rail is four times higher than before the pandemic.
The effects of that backlog are already being felt with delivery delays for a variety of products, from appliances to sports equipment to automakers and could catch up with toys this fall.
While the behemoths in the toy trade have relationships with shippers and retailers to weather the shipping crisis and "will be in a good position" this holiday season, Desmond said they might not have as much variety to offer in the coming months. The Toy Association includes manufacturers and retailers such as Wal-Mart, Target and Amazon among its members.
However, the vast majority of the association's members are small business owners who may not be so lucky. The supply chain crisis has already led to 500 to 800% increases in shipping fees, Desmond said.
Some American toymakers, he said, are also experiencing materials shortages for things like resin — a key component in plastic toys.
"We have manufacturers trying to get finished products from China, and American manufacturers who are having trouble sourcing components and materials to make their products here in the U.S.," Desmond said.
While the toy industry is facing a whole host of issues that could lead to toy shortages this holiday shopping season, there's some good news.
"Despite all the challenges, we're only seeing modest price increases," Desmond said. "You're not going to see toys with significant markups because a lot of companies have relationships with retailers where prices are set and they won't be able to raise them."