Steve Pasierb

On stranger Yuletides: How shipping is shaping a very different holiday season this year

From West Yorkshire to West Philadelpia, the global toy industry is feeling the impact of the continued shipping chaos and container price hikes. In a note to the international community, the Toy Association’s Steve Pasierb calls on unity and communication to best ride it out

Arguably, potential upsides and dramatic risks have never been greater for the business of toys, games, and play than they are today. Over the first half of 2021, the global play community saw toy sales rise an impressive 15 per cent over 2020 as families and playful adults continued to seek comfort and entertainment in toys amid the ongoing pandemic. Meanwhile, a storm of disruptions to supply chains worldwide – from holiday ocean shipments to raw materials, labour shortages, and trucking among others – are creating severe financial hardships and growing uncertainty as we head into our industry’s critical Q4 selling season. With the situation only expected to worsen and continue well into 2022, the U.S. Toy Association is hard at work to provide members with as many solutions and as much actionable information as possible to keep their businesses moving forward.

To help companies stay on top of the latest developments and any potential solutions in a seemingly stubborn situation, The Toy Association rolled out a new resource center providing a one-stop shop for information. Here, toy professionals can access new U.S. government and port updates, the Association’s topical ondemand business webinars exclusive to our members, and links to additional business tools to help track and plan shipments, as well as information on our ongoing shipping industry advocacy work at federal and international levels.

The Toy Association continues to press elected officials and government agencies to take aggressive action, including a meeting between the Executive Committee of our governing board meeting with the chairman of the Federal Maritime Commission (FMC) to provide a direct briefing of the damage being caused to toymakers. We also fully support the newly introduced Ocean Shipping Reform Act of 2021, which addresses many of the long-term systemic supply chain and port issues. Our recent letters to the House Transportation Subcommittee and all members of Congress underscore the significant negative impacts of shipping delays, increased costs, and container shortages, and how these disruptions put the entire toy industry’s business operations at risk.

While we know our industry’s largest toy manufacturers are year-round shippers with the contracts and bandwidth in place to ensure delivery of their key drivers for holiday, this shipping crisis is deep and dramatic among the hundreds of small- and mid-size companies that utilise the spot market for shipping and which make up 95 per cent of The Toy Association’s membership. These members are reporting shipping price increases anywhere from 500 to 800 per cent (from USD$3,000 to in some cases USD$24,000+ for a single container with surcharges, if they can even get access to containers or space on ships), and rising costs for cargo and trucking brought on by detention, demurrage, and increases in transit times of 75 days or more. There is also a fear among many that if freight does not start moving, retailer orders may be cancelled, which has a disastrous impact on bottom lines and leaves unsold product to linger after the prime holiday season. What’s made all these factors even more challenging is that they are unfolding against the backdrop of a global pandemic.

Buy early is our cry! Now is the time to get the word out to consumers to shop early for the holidays while selection is strong and not to delay in the hopes of finding last-minute deals in an environment that could see a potentially limited selection if not overall supply. We began this communication effort more than a month ago, advocating consumers to #ShopEarly4Toys. The Vice President of the United States even included the toy industry situation in her trade remarks recently upon arriving in Vietnam. I’d encourage the UK toy and play community together with retail partners to start singing this shop early song long and loud!

In the end, we’re all in this together. I know our team is grateful for our excellent collaborative relationships with the British Toy and Hobby Association as well as Toy Industries of Europe. We must keep channels of communication active and open with our fellow associations. What’s more, if we can be of assistance to anyone – manufacturer, distributor, retailer, or association – both with issues here in the U.S. or around the world, our team in Washington, DC stands ready. And we want to help.

While our industry likes to speak proudly of our creativity and inventiveness, I would also argue our biggest strengths may indeed be determination and resilience against all odds. Onward! All good wishes for your continued health, safety and a path toward a prosperous close to 2021.