Steve Reece

When the ships are down: It’s rough seas for now, but the storm will pass

For months now, conversation has centered on the ongoing China shipping chaos and the astronomical price hikes of containers, helping shipping companies to see record-smashing financials while retailers prepare for a Christmas of diminished stock levels. But, says Kids Brand Insights, it wont last forever; it’s just another storm for the toy industry to weather

By Steve Reece

We in the toy business have long since taken for granted the regular process of shipping products from Asia back to the UK. Aside from the occasional lost container, grounding of a container ship or typhoons, it is remarkable just how smoothly things have gone. Until recently of course when things have been beyond what could be described as difficult.

Demand has massively outpaced supply in terms of container and ship availability leading to an exorbitant and scandalous increase in shipping costs which is having some hefty impacts on the toy business. From price rises to pending stock shortages heading into peak season trading, this is not going to be an easy Christmas by the looks of it. Toy companies are inevitably going to have reviewed what products they order and have shipped based on new financial calculations which may make some products unviable. Inventory will be tighter this Christmas, and several retailers have warned consumers to buy their toys early to avoid missing out.

Like all situations though, nothing is forever! There have been reports that China’s central government has instructed Chinese shipping containers manufacturers to increase production to help to ease the issue. The three biggest container manufacturers in the world are in China, and they are already set to have record output of containers this year according to reports. It also seems likely that when hard working, pandemic ravaged punters can’t find the toys they want to buy for their kids at Christmas there is going to be a reaction, maybe even a major backlash. In the UK, this would probably have no great impact on global shipping companies, but should U.S. politicians jump on this bandwagon, and seek action against shipping companies who perhaps have too much control over the market to ensure healthy competition, then things could get interesting.

Another likely solution of the shipping issue is the winding down of the severe impact of the pandemic. We may need booster jabs, covid may still be around for years, or even decades to come, but it looks like mass vaccination has reduced covid from severe threat to life on a great scale, to a health threat on a par with other health issues in this country. Severely restrictive lockdowns certainly look less likely now, and once consumers around the world head back towards more normal life patterns and buy less stuff out of season, the shipping issue will likely correct itself.

"When hard working punters can't find the toys they want for Christmas, there's going to be a reaction, likely a backlash."

Steve Reece is the founder of the toy expert consultancy, Kids Brand Inisght, leaders in supplying services to the toys and kids' entertainment industries.