Industry Forum

INDUSTRY FORUM TOY ASSOCIATION

Toy manufcaturers have been grappling with shortages of ships and containers, high wait times at ports, and increased freight rates.

The Toy Association Supports Members Amid Global Shipping Crisis

By Kristin Morency Goldman

With toy manufacturers struggling to get their products on boats to the U.S., retail inventories dwindling, and consumer demand surging, the toy industry is eyeing the fourth quarter with grave concern. “Over the past several months, The Toy Association has been talking with government agencies and corporate entities about the ongoing shipping crisis,” said Ed Desmond, executive vice president of external affairs at The Toy Association. “Although much remains out of our control — from a global lack of ships and containers, to staggering wait times at the ports, to the continued impact of COVID-19 on the workforce, to skyrocketing freight rates — we are certainly doing everything we can to sound the alarm among authorities, and to help our members navigate the crisis as they plan for the holiday

season.” This summer, The Toy Association sent letters to all 535 Congressional offices, urging them to prioritize developing and implementing both shortterm and long-term solutions to resolve this emergency, especially as shipping for the holiday season is set to accelerate in the fall months. The Toy Association has also remained in regular contact with its partners in the global toy community. At the June 10 International Council of Toy Industries (ICTI) Annual General Meeting, the shipping predicament was a key topic of discussion among the various impacted countries. Desmond also recently spoke with a senior official at the Federal Maritime Commission (FMC) to discuss the issue, providing the FMC with feedback from Toy Association members who are experiencing high shipping rates and container shortage issues. The FMC has heard complaints across industries and while it is not authorized to regulate shipping rates, it has increased monitoring of shipping lines and is completing an investigative report on the impact of COVID-19 on the supply chain. FMC Commissioner Rebecca F. Dye issued information demand orders to ocean carriers and marine terminal operators to determine if legal obligations related to detention and demurrage practices are being met. At the FMC’s April meeting, FMC Chairman Daniel Maffei stated, “While most participants in the supply chain are doing their best to cope with the unprecedented import boom, there are reports of container ship lines and terminal operators unfairly taking advantage of the situation or denying service to exporters in a way that may violate the Shipping Act. We must get to the bottom of this situation ASAP and that’s why Commissioner Dye’s investigation is crucial. Just yesterday, Commissioner Dye and I met with the leaders of two important House subcommittees. These issues clearly have their attention and companies providing ocean transportation services would be well served to voluntarily take steps that address these challenges.” To provide members with as much information as possible about the shipping season early in the year, The Toy Association held two recent webinars on the issue. Both sessions are now available exclusively to Toy Association members (visit ToyAssociation.org/webinars to access the recordings). The first session, held in May, included a one-hour discussion with Gene Seroka, executive director of the Port of Los Angeles, who provided an update on the situation at the ports and a forecast of what toy companies could expect during the 2021 holiday shipping season. The second webinar, held in July, was led by representatives of the Toy Industry Shippers Association (TOYSA), including its director of operations, Craig Akers. The discussion offered participants the latest updates on the shipping crisis plaguing the industry. The Toy Association’s advocacy on this issue has been ongoing since last year, when COVID-19 caused significant labor and equipment shortages. In late 2020, the team hosted a virtual meeting with Seroka to support members whose products were floating offshore at the Port of Los Angeles. The Toy Association also worked closely with the U.S. Consumer Product Safety Commission (CPSC) and officials at the Port of Newark in New Jersey to help a member company track down and get their products released in time for the last-minute holiday rush. A critical container of products from doll manufcaturer The Queen’s Treasures was delayed at the Newark port. “I cannot express how thankful I am for the advocacy of The Toy Association,” said Joann Cartiglia, president of The Queen’s Treasures. “After having an already late container randomly selected for an intensive exam, I thought we would have to disappoint thousands of parents and grandparents this Christmas. An additional port delay would cause us to miss our shipping deadline for backordered items. I contacted Ed Desmond, and he and his team immediately sprang into action on our behalf. With the help of The Toy Association and the cooperation of CPSC and the Port of Newark, we were able to get our shipment of compliant, safety-tested toys released.” The Toy Association continues to actively engage on this issue both in the U.S as well as globally and will keep the toy & play community apprised of developments. Toy Association members are encouraged to send comments on their shipping rate increases and container shortage issues to the FMC at FF29@FMC.com.