As cargo delays worsen, U.S. and European suppliers are scrambling to secure Christmas goods Reuters

Author: Lisa Beltline and Jonathan Sol

Los Angeles/London (Reuters)-Supplier of Walmart (NYSE:), the goal (NYSE:), Amazon.com (NASDAQ:) and other major retailers told Reuters that they will place holiday orders for products made in China earlier this year because the global shipping backlog may make many gift buyers Go home empty-handed during Christmas shopping. season.

Reuters surveyed more than a dozen suppliers and retailers in the United States and Europe, from toys to computer equipment. Everyone expects that due to transportation bottlenecks, including global container shortages and the recent closure of the COVID-related southern port of Yantian, serving manufacturers near Shenzhen, holiday inventory will be delayed by several weeks.

The risk for retailers is that goods are out of stock in large quantities, just as shoppers are preparing to open their wallets to buy toys, clothing, and other goods.​​​

Isaac Larian, CEO of Los Angeles-based MGA Entertainment Inc, said: “This will be a mess.” The company sells LOL Surprise, Bratz, and Bratz to Amazon, Walmart, and Target. Little Tikes and other toy brands.

His company stuffed hundreds of containers in Yantian Port with toys. If he can’t get enough inventory for his retail customers, “this will seriously affect Christmas sales,” Larian said.

According to data from S&P Global, the reason for the deadlock in shipping is not just Yantian’s backlog. Yantian is considered Amazon’s first seaport in China, accounting for the e-commerce company’s three months to May 31. 32.4% of shipments processed (New York Stock Exchange:) Market Intelligence’s trade data company Panjiva.

Although the port of Yantian reopened on June 24, the shortage of containers still restricts full-scale activities, global cargo ships are overbooked, containers are stranded in the wrong location, and the port is congested.

Products are piled up in factory workshops, warehouse parking lots, seaports and railway yards-more backup threats than “shipageddon” during last year’s holiday, when many items arrived after Christmas.

Amazon and other retailers did not respond to requests for comment.

‘Unable to create inventory’

Jason Miller, associate professor of supply chain management at Michigan State University’s Elibrod School of Business, said retailers usually sell products as quickly as possible.

“Their sales are so high now that they can’t significantly increase their inventory levels,” Miller said.

He said that if this fierce editing continues, retailers-excluding car-related operators-will have to increase inventory by about 65.1 billion U.S. dollars to achieve the same pre-holiday inventory sales conditions as in 2019, he said .

Andy Bond, CEO of Pepco Group, which owns British discount retailer Poundland, told Reuters separately, “This is definitely a daily challenge and headache we face.”

Clothing sellers are considering air operations as an option-including PVH Corp (NYSE:), which owns Tommy Hilfiger and Calvin Klein brands.

Mac Harman, CEO of Balsam Hill, which sells high-end artificial Christmas trees and other holiday decorations, said that Christmas-themed inventory “may appear on Thanksgiving weekend–or maybe not.” He said that some of his orders from China may not be available. Delivered in time before the sales start in July, even before Christmas.

He said: “We are now hundreds of containers behind where we should be,” and inventory products have been reduced by at least 10%.

Michael Shah, the chief executive of British-based Easy Equipment, provides catering equipment for the UK. After fighting with containers stranded in China, he is scrambling to deliver the goods early.

“We have started to order more inventory because we know that by September to October, we must be prepared,” Shah said. “On Christmas Eve, the restaurant trade became busy, and we had to bite the bullet and try to snap up inventory.”

Carly McGinnis, head of production, sales and logistics at Exploding Kittens, wants to ensure that major retailers such as Wal-Mart and Target don’t run out of games. The Los Angeles-based company will make more games this year and start shipping them in March, about four months ahead of 2020.

She also gave Walmart and Target the option to import some of their orders. Since these two retailers are one of the largest importers of containerized goods in the United States, they may have priority in obtaining space on containers and cargo ships.

“I have told our investors and my internal team that some things will be out of stock – there will be problems. I don’t know when or what it will be, but it will definitely happen,” McGinnis said.

At the same time, Bernie Thompson said that he has given up on holiday replenishment of laptop docking stations and some other computer equipment he sells through Amazon and other retailers. That’s because some of his best-selling products may take more than 12 months to be available, and these products rely on hard-to-find computer chips.

“Christmas is too late,” said Thompson, the founder of Plugable Technologies, based in Washington.