Why shipping snarl will be costly for merchants, holiday shoppers

Walmart, like Target, is chartering its own cargo ships, to get goods to stores. The retailer has grown its inventory of electronics, with a focus on TVs, laptops and video games, in preparation for the holidays. (Photo by David Crane, Los Angeles Daily News/SCNG)

Sticker shock in the stores

Consumers will also be facing sticker shock this holiday season, particularly when looking for items like T-shirts and jeans.

The price of cotton rose 22% over the past two weeks as a result of severe drought and impacted production. Overall apparel prices rose 4.2% during the 12 months ended in August.

But prices aside, many consumers will likely be clamoring for items on Amazon’s list of the hottest toys for the 2021 holiday season. They include the Big Dig Working Excavator with Wheels ($55), the Star Wars Snackin’ Grogu ($79) and the Hot Wheels City Ultimate Octo Care Wash ($80), among other items.

  • Ashley and Emma use some of their We Wear Cute items at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)

  • Ship to shore cranes work the container ship CMA CGM Laperouse at the Georgia Ports Authority’s Port of Savannah, Wednesday, Sept. 29, 2021, in Savannah, Ga. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Stephen B. Morton)

  • Fox Messitt, from “Fuller House,” tries out a Pelican Explore & Fit Cycle, by Little Tikes, at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)

  • Teenage Mutant Ninja Turtles vs Cobra Kai, by Playmates, are displayed at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)

  • Girls play with Disney Doorables at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)

  • at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With less than four months until Christmas, toy companies, particularly small makers, are increasingly worried they won’t be able to bring their toys into the U.S. from China in time, amid major supply issues. (AP Photo/Richard Drew)

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While toys are the perennial holiday favorite, getting them to the shelves without long delays and high delivery costs is a different matter.

Nektar Petroff has gotten used to waiting.

As the owner of Most Fun Toys, an online business based in North Hollywood, she’s in the middle of ordering merchandise for the busy holiday season. But she’s waiting an extra week or two — and sometimes more — to get her goods. Adding to her stress are the shipping costs, which Petroff says are often two to three times higher than the value of the merchandise she’s ordering.

“I ordered 24 dollhouses and paid about $120 for them, but the shipping cost me $300,” said Petroff, who also gives many of her toys to children in need. “Before, the shipping would have been closer to $200.”

With the holidays fast approaching and supply chains clogged, local retailers big and small are scrambling to get holiday goodies on their shelves.

Nektar Petroff, owner of Most Fun Toys based in North Hollywood, has seen shipping costs for her toy orders go up by some 33%. (Courtesy of Most Fun Toys)

Back-ups at Southern California ports and a shortage of warehouse workers and truckers will likely make that a tall order for merchants. So what are they doing to prepare for the shopping onslaught?

Getting very nimble.

Jon Gold, vice president of supply chain and customs policy for the National Retail Federation, said companies are mitigating the risks by pivoting fast, over and over.

Read more: How 20 workers keep cargo ships from crashing off Southern California

“They’re bringing products in earlier than usual, shifting to different ports if need be, using air-freight delivery instead of cargo ships, and in some cases, chartering their own cargo vessels,” he said.

The price for containers from China to the U.S. West Coast has hovered near record highs, with contract rates 25% to 50% higher than a year ago, according to S&P Global Platts.

Switching the game strategy

Target is one of the larger retailers finding new ways around the overwhelmed supply chain.

The company is ordering larger shipments, even chartering its own container ship, ahead of the holidays.

“As co-managers of the ship, we can avoid delays from additional stops and steer clear of particularly backed-up ports,” the company said last week.

Sixty container ships sat offshore from the ports of Los Angeles and Long Beach on Wednesday, October 6, waiting to unload their cargo. (Photo by Jeff Gritchen, Orange County Register/SCNG)

That traffic jam is playing out at Southern California’s twin ports, which have been clogged for months.

“As of this morning, there are 60 container vessels waiting to get into the two ports,” Port of Los Angeles spokesman Phillip Sanfield said Wednesday. “Twenty-five are headed to L.A. and 35 are headed for Long Beach.”

Related: Christmas at risk as supply chain ‘disaster’ only gets worse

It’s estimated that nearly half a million shipping containers are waiting outside the ports to be unloaded, and Sanfield said ships are waiting about 10 days to unload their goods.

Some waits have been much longer.

Chatsworth-based MGA Entertainment, one of the nation’s largest toymakers, said it had more than 600 containers filled with toys that …read more

Source:: Los Angeles Daily News

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