It is a fact that China is the manufacturing powerhouse for Christmas presentations. But this year there seems to be an imminent delay for these gifts to reach millions of people around the world, as there has been increased congestion at ports in many countries. The retailers are apprehensive that deliveries for the holiday season could be delayed.
The supply chain crisis has largely been driven by the Covid-19 pandemic, with demand surging as economies re-open. Meeting that demand hasn’t been easy as producers are simultaneously dealing with labour shortages and a slowdown in the transport system.
In Asia, manufacturing hubs, like Vietnam, are just emerging from a wave of the coronavirus, causing a disruption in production. While China – the factory of the world – is also facing an energy crunch leading to shutdowns at manufacturing hubs and ports.
Containers shortage in China
The voyage for a container from Asia to the US generally takes just two weeks, but at the moment it is taking about 70 days from the product leaving the manufacturing site to reaching at the sales point in the US. That means even if a popular toy leaves China today, it now won’t make it to the shops in the UK, mainland Europe or the US in time for Christmas. That’s largely because the ongoing logjam at US ports is having a ripple effect back in Asia. Chinese ports don’t have enough shipping containers because they haven’t returned from the US.
Measures taken by the US are not enough
In order to cope up with supply chain bottlenecks and to ease the situation, the US President Joe Biden announced that the Port of Los Angeles in California would work around the clock. But not everyone thinks this will help enough at this point. As experts opine that these measures should have been taken much earlier and opening the ports 24/7 now won’t make much difference to the present logjam at ports. They opine that in order to solve the situation all parts of the supply chain – including truck drivers, train operators and warehouse operations need to add extra capacity.
US is the biggest importer toys worth over $17bn and if we add games and sporting goods to that list then the figure gets double and a large chunk of these products which is about 80 per cent comes from China. And many of these toy factories in China are located in a coastal province of Guangdong and this area has recently been hit by power cuts.
Experts in the industry feel that this logjam will last at least for another three months and the congestion will come back to Asia. They feel that there is always an imbalance of trade between West and East. Some experts opine that the supply chain problems will be resolved when shipping industry sees more containers coming on to the market next year. They are hoping that the present logjam won’t disrupt Santa Claus’ plans and Christmas too much.