Top toymakers say their products will be harder to find and more expensive this holiday season
The makers of some of the most popular toys in the United States sounded the alarm this week about the global shipping crisis and labor shortages limiting their ability to keep stores stocked throughout the fall holiday shopping season.
"There is going to be a major shortage of toy products this year," MGA Entertainment CEO Isaac Larian told CNN Business. "The demand is going to be there. What is not going to be there is the product to fill the demand."
"Whoever is telling you it's only the small toy companies' problem is full of it," Larian said. "MGA is the fourth-largest toy company. We are not small. The beauty of MGA is we are private, so I can talk to you openly."
The container that cost $3,200 last year is now $22,000," Larian said. "The installation of raw material and labor has gone up exponentially. We've seen a 23% increase in cost of product in China without the logistics. That is going to translate to higher prices with retail."
Consumers can expect price increases of 5% to 10%, according to toy industry insider Jim Silver, CEO of Toys, Tots, Pets & More, a leading consumer video review site.
Last edited by GordonBlue; 08-30-2021 at 10:38 AM.
$22k is an exaggeration (you may pay that for certain containers but the average is much lower), but freight costs have definitely gone up.
This video is a good explanation of the supply chain and freight market issues for anyone who wants to spend 15 minutes learning about it:
i don't know... one of my customers was talking with his bauer rep and the cost of shipping is insane. a container that cost $3k is now $15k-$20k.
the guy who runs one of my bands is a 'higher up' at a local flooring company. they are now seeing bills for $30k to get a container to north america.
but as mentioned in the original post - supply for lots of stuff is a huge issue already. i see it often in my industry.... shirts, caps, jackets, track suits, hoodies, bags, etc - all very limited stock.
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i don't know... one of my customers was talking with his bauer rep and the cost of shipping is insane. a container that cost $3k is now $15k-$20k.
the guy who runs one of my bands is a 'higher up' at a local flooring company. they are now seeing bills for $30k to get a container to north america.
but as mentioned in the original post - supply for lots of stuff is a huge issue already. i see it often in my industry.... shirts, caps, jackets, track suits, hoodies, bags, etc - all very limited stock.
I'm about to get hit by a huge bill, I'm sure. I have an order being manufactured in China that is just about done. Usually costs $5k to bring it over. Last time was $7500. This time could be bruuuuutal.
Same here, we started a new company this year and we're having our product manufactured in Japan (high-end optics), and it's scheduled to ship in October/November timeframe. I'm hoping that these prices come down a bit, this is way more than we had originally budgeted for shipping and I'm scared it's going to eat into our margins.
Yeah that container cost of $22,000 is not entirely out to lunch. Apparently there are freight charges, and then there are the freight charges being paid to actually get your container onto a ship. I've seen as high at $18,000 for a 20' container for that lately.
What is causing this shipping crisis and costs increases? I am trying to understand. Canada has labour issues due to many reasons but are the people in the rest of the world also refusing to go to work?
Yeah that container cost of $22,000 is not entirely out to lunch. Apparently there are freight charges, and then there are the freight charges being paid to actually get your container onto a ship. I've seen as high at $18,000 for a 20' container for that lately.
I think it's a fair number too. I know of several manufacturers that are up near that amount to actually get their container on a ship.
also of note in the article
"Even after paying more to get his products to US shores, Larian said a trucker shortage is preventing him from getting his toys into warehouses and ultimately onto store shelves.
"We've had hundreds of containers on 46 ships sitting in the ocean at the port of LA and Long Beach for the past 30 days," he said. "There are people to unload it, but there are not enough trucks to pick it up."
so with all that, I think it's smart to do your christmas shopping now if possible. sucks to have a kid who wants one or two particular toys and not being able to get it.
What is causing this shipping crisis and costs increases? I am trying to understand. Canada has labour issues due to many reasons but are the people in the rest of the world also refusing to go to work?
Just watch the video posted near the top of the thread
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it will be interesting to see if this cost dynamic changes much in 2022 and beyond as to me it seems like a great opportunity for shippers to up their prices for the long haul
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it will be interesting to see if this cost dynamic changes much in 2022 and beyond as to me it seems like a great opportunity for shippers to up their prices for the long haul
It will be interesting, because if the cost of shipping becomes exorbitant maybe we can lean on some of the lessons we should have learned from the Pandemic and become more self-sufficient as opposed to being dependent on having our goods shipped to us from elsewhere.
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It will be interesting, because if the cost of shipping becomes exorbitant maybe we can lean on some of the lessons we should have learned from the Pandemic and become more self-sufficient as opposed to being dependent on having our goods shipped to us from elsewhere.
100% - it will be interesting to see if any/some companies bring back production to north america - err, i just mean america
one would think that a company could likely find space somewhat easily (although maybe it is just cheaper to build new) and get a lot of tax breaks if they were to re-open shop in rural america - although perhaps building the machines to produce whatever widget would be a painful excercise
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100% - it will be interesting to see if any/some companies bring back production to north america - err, i just mean america
one would think that a company could likely find space somewhat easily (although maybe it is just cheaper to build new) and get a lot of tax breaks if they were to re-open shop in rural america - although perhaps building the machines to produce whatever widget would be a painful excercise
~$20,000 per container increase has to change the economics for some things - more things should make sense to make here.
shortage of goods & price increases this holiday season
