Supply chain issues leading to shipping delays, massive increase in costs ahead of holidays

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Posted at 5:49 AM, Sep 21, 2021
and last updated 2021-09-21 08:31:42-04

(WXYZ) — You may not hear holiday music playing in the stores just yet, but you may have heard talk of earlier-than-usual holiday shopping because of the pandemic's lingering supply chain issues.

Related: Artificial Christmas trees could see double-digit price increase this year due to supply chain issue

Rick Vespa, the co-owner of English Gardens, which sells high-end Christmas trees and holiday decor, said his stores usually start setting up seasonal displays in August.

“This year it’s been delayed because of the delay in getting merchandise," he said.

According to Vespa, about 50% to 60% of their hard goods inventory is still en route.

He also said he's already stocking plant containers for 2022 because he started ordering much earlier than normal once he saw the supply chain issues.

The supply chain is the path from the factory, to a container, onto a truck or rail, to a port, loaded onto a ship, shipped to another port, unloaded onto a truck or train, and transported to a distribution center before going to the store.

Vespa said there have been delays and shortages at every step.

Walmart is another company trying to deal with supply constraints.

CEO Brett Biggs confirmed on a company earnings call in August that the company is "adding extra lead time to orders and chartering vessels specifically for Walmart goods."

Target announced earlier this month that it has also chartered its own container ship.

The anticipated shortages have been known for months. In July, we spoke with metro Detroit toy store owners about it.

“We’re finding that a lot of the toys that are being shipped from overseas are the ones that are really affecting us the most," Julie Everitt from Whistlestop Hobby & Toy said in July.

Everitt told 7 Action News this week that prices have gone up 10% on some products, certain suppliers are now charging for fuel, and a number of companies are also giving them out-of-stock lists now.
So, a toy shortage is possible.

As for ground and air shipping, UPS said it continues to add capacity and has opened new facilities around the world. UPS has also added six more 747-8 freighter aircraft bringing its total fleet of this large plane to 28.

You can expect prices to go up because shipping costs have gone up so much. Vespa said last year, English Gardens could order a 40-foot shipping container from China for $7,000. Now, he said the cost per container runs $13,000-$23,000.

The Drewry World Container Index report from September 16, 2021 showed the average cost to ship a 40-foot container increased 2.9% to a price of nearly $10,375 per container. That's 323% higher than a year ago and the 22nd consecutive week of increases.

So, plan ahead with a budget and shop you don't waste your money.