How can toy companies survive this year with limited power and production?
Time of issue:
2021-11-03
▌The twists and turns of a toy from China to the United States Take, for example, holiday essential products such as plush toys: if they are to be shipped from Ankang, Shaanxi, China to consumers on
▌The twists and turns of a toy from China to the United States
Take, for example, holiday essential products such as plush toys: if they are to be shipped from Ankang, Shaanxi, China to consumers on the east coast of the United States, what difficulties might they face? ①The cost of toys has risen; ②Waiting for the departure of empty containers; ③After arriving at the port of Los Angeles, California, continue to wait; ④The epidemic has caused a shortage of workers and greatly reduced transportation capacity.
On the whole, compared with the level before the epidemic, the total transportation cost of a plush toy has increased by 650% from the production to the arrival of consumers. All logistics bottlenecks in the end mean that consumers may have to pay higher prices. In the above-mentioned logistics process, every detail problem is difficult to solve in a short period of time. Jeremy Siegel, a professor at the Wharton School of Business in the United States, warned that the inflation problem in the United States will be much hotter than the Fed expected.
▌Commodity supply is tight and prices are bound to rise
According to foreign media reports: The Port of Los Angeles is full of freighters waiting to be unloaded. Faced with the holiday shopping season at the end of this year, toy industry players can't laugh.
Isaac Larian, CEO of global toy giant MGA Entertainment, said that port congestion has been a common phenomenon on the California coast of the United States since at least May. He looked at the ships on the sea every day, thinking of toys that hadn't arrived yet.
Delays in unloading may endanger whether parents can buy toys in time, pack them and hide them under the Christmas tree. If they cannot be bought in time, these toys may eventually be on the shelves at the end of winter and be cleared for auction.
As a manufacturer of LOL Surprise, Rainbow High and Little Tikes, MGA currently has enough inventory to satisfy 65% of unfulfilled orders. But Larian said that he originally expected sales to grow by 50% this year, but now it is expected to be only 18% to 20%.
Many toy manufacturers are struggling to cope with the huge bottleneck in global transportation routes caused by the epidemic, which was worsened by the blockage of the Suez Canal in March. Larian said that a container that used to cost only US$3,200 is now asking for more than US$20,000. And even if the containers are unloaded, there are not enough truck drivers to transport these goods.
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