COVID, storms and a shortage of key materials have disrupted global supply chains.
A cargo ship at the Meidong Container Terminal at the Ningbo Zhoushan port in China. The port was hit by a typhoon in July and the terminal closed down after a single positive COVID test in August. Port shutdowns are one of many factors slowing down the movement of goods from overseas.
The school year just started, Halloween is coming and Thanksgiving plans are still up in the air. We get it. Your hands are full.
Still, consider ordering your year-end gifts now if they’re an important part of your holidays. Gifts you buy online on Black Friday might not have enough time to arrive by Christmas a month later, let alone Hanukkah, which this year sees the first candle lit on the Sunday after Thanksgiving.
Any product you order online could take longer than usual for delivery. Global shortages of microprocessors, magnets and plastic have slowed production to a crawl. When products are available, shipping has choked due to a combination of heightened demand, COVID-related port shutdowns and storm-created chaos. Seventy-three cargo ships await unloading at the ports of Los Angeles and Long Beach on Saturday, a record. Tennis balls, couches and even pickles have been affected.
The takeaway: It’s impossible to know whether a specific laptop, sound system or pair of jeans will be in stock ahead of the holidays.
“If there’s something you need or want, the risk of not having it in time for the holidays is likely,” said Mark Stanton, general manager of supply chain solutions at PowerFleet. He advises people to shop ahead of the holiday shopping season, if possible.
Holiday shopping rushes are nothing new, and the sales season has increasingly started earlier in the year. Black Friday, the day following Thanksgiving, now marks the generally accepted beginning of the shopping season. Sales online often start earlier.
Shopping for the holidays has driven roughly one fifth of annual retail sales in recent years, according to the National Retail Federation, which said US retail sales totaled more than $787 billion in November and December of 2020. Online spending accounted for more than 26% of that figure, the NRF said.
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The shopping season is so well-anchored in our culture that it served as the backdrop of Jingle All The Way, a comedy featuring a panicked Arnold Schwarzenegger on the hunt for a toy his son wants. The movie debuted in 1996, the same year that Tickle Me Elmo, a toy based on the Sesame Street character, prompted fights among parents in Walmart aisles. Some desperate parents chased after delivery trucks to get their hands on the fuzzy, red monster toy, which bleats out electronic giggles.
A single toy hasn’t dominated holiday sales so fully in recent years. But an Elmo equivalent, if one emerges, will be harder to get than usual this time around. Additionally, it might be more expensive, because toy makers can recover the higher cost of shipping with full-price sales of high-demand toys near the holidays, according to e-commerce services company CommerceIQ. And the delays won’t be limited to toys. Anything computerized, magnetic or made of plastic — think electronics, appliances and home goods — could be hard to get.
Microchips power everything that runs software, including cars. The shortage in chips, triggered by a production lag early in the pandemic followed by surging demand, has meant manufacturers have struggled to produce enough computers, phones and tablets to fulfill orders, which soared during COVID lockdowns.
Since chips are in so many items, the shortage is weighing on products outside of home electronics. It’s been so bad that Ford had to temporarily shut down some manufacturing of its F-150, the best-selling vehicle in the US, as it looked for more chips.
Magnets, which are used in products ranging from toys to electronics, have also been in short supply. SDM Magnetics, a manufacturer, recently told customers that China has tightened regulation of the mining of rare earth minerals used in magnets. That’s prompted some middlemen to hold on to mineral supplies, leading to fewer and more expensive magnets for sale.
Plastic resin pellets at an Illinois facility. Storms plagued the plastics industry in the Gulf Coast over the past year, triggering shortages.
A chain of events sparked by early pandemic shutdowns has also created a shortage of one of modern society’s most common materials: plastic. That’s meant backlogs for cars and RVs, house siding and PVC piping, and disposable restaurant supplies such as plastic cups.
Bindiya Vakil, a supply chain expert, wrote in the Harvard Business Review that storms exacerbated the shortage by shutting down Texas and Louisiana oil producers that process the chemicals used in manufacturing plastic. The Gulf Coast storms started with Hurricane Laura in August 2020 and continued with an ice storm in early 2021.
Plastic makers still haven’t caught up to demand since those setbacks. That was among the issues that hobbled production and shipping of Rainbow High dolls, a toy that MGA Entertainment CEO Isaac Larian recently told The Washington Post might not make it into the US in time for Christmas.
Finally, due to outbreaks of the delta variant, the apparel industry has been hit by factory closures in Vietnam, where increasing amounts of clothing are made. On Thursday, Nike said the effects of the shutdowns will ripple into the New Year, when it expects to see shortages of its products.
Shortages of components and material aren’t the only reason the ideal gift for your loved one might not make it to a US warehouse in time for you to receive it by December. Goods from overseas are put into shipping containers before being sent abroad. Then they’re unloaded and sent to warehouses around the country. That isn’t happening quickly right now.
The shipping slowdown is caused by both a glut of products moving through the system and a shortage of containers and equipment. With an influx of products coming out of ports, logistics companies aren’t always able to hire enough people to drive trucks and unload containers at their warehouses around the country, said Stanton, the supply chain expert. That slows the flow of empty containers back to ports in China and Vietnam and makes them even harder to get.
Ships wait outside the ports of Los Angeles and Long Beach in August. The backlog of ships has worsened since then.
COVID-19 and storms have waylaid the industry too. If one port gets shut down due to weather or an outbreak, later points in the delivery system get thrown out of whack. In July, a typhoon struck an area of coastal China that’s home to several ports, causing shutdowns of air, rail and sea shipping. In August, the Meidong Container Terminal shut down its operations at the Ningbo Zhoushan port in response to a single positive COVID test. The decision effectively closed the world’s third-busiest port.
The highly contagious delta variant could bring further port closures in the future. In any case, the combination of disruptions has caused the cost of shipping to skyrocket, making it even harder for companies to import goods.
The system has also been plagued by random setbacks, as in July when the cargo ship Ever Given lodged itself into the Suez Canal, bringing a major shipping thoroughfare to a halt for nearly a week. Factory shutdowns in Vietnam mean that Nike expects shortages of its products in the New Year.
“It really is this ripple effect that goes down the supply chain,” said Jen Blackhurst, a professor of business analytics at the University of Iowa.
If you don’t want to spend the next three months tracking packages online, think about opting out of buying items shipped from overseas. Sure, you may have scoffed at alternatives to whatever the hot gift was in the past, but this is the year to reconsider.
If you have the time and skill, you can make homemade gifts or hand out vouchers for babysitting or yard work, if that’s something the recipient will appreciate. Buying tickets to events, museum memberships or restaurant gift cards are also easy options — and let your loved ones enjoy an outing.
You can also think about locally made products. Many small businesses sell items made by local artisans online, either through a web ordering platform or with Instagram and Facebook pages announcing new products, says Rachel Smith, the president and CEO of the Seattle Metropolitan Chamber of Commerce.
You might have to think outside the box for gifts this year. Locally made gifts, event tickets and refurbished electronics are typically already in the country, not waiting to be unloaded from a cargo ship.
“Those local businesses that have added or enhanced their e-commerce platforms have navigated the pandemic better” than those that didn’t, Smith said.
Dan Wallace-Brewster, a senior vice president of marketing at e-commerce services company Scalefast, says consumers are increasingly getting comfortable with buying secondhand goods online. Retailers and device makers often sell refurbished electronics on their websites, and the discounts they offer mean your budget can go a little further than it would on something new. Luxury brand resellers, such as the Real Real and the Vestiaire Collective, have also sprung up to offer big name brands at lower prices than retailers or manufacturers offer.
The products these companies sell are typically already in the US, meaning there’s little concern about the global supply chain. The quality of goods available on the sites along with growing consumer acceptance has reached “to the point where you might be willing to gift a secondhand product from the right market and not be ashamed of it,” Wallace-Brewster said.
If you’re still scrambling the night before your holiday gift exchange, there’s one more tried-and-true option: a gift certificate. It’s either that or tying a bow around a shipping confirmation for an ordered — but undelivered — gift.
COVID, storms and a shortage of key materials have disrupted global supply chains.