In August, well before most consumers started making their holiday shopping lists, Vice President Kamala Harris cautioned, "If you want to have Christmas toys for your children ... now might be the time to start buying them."
Supply chain experts, industry analysts, and business owners all echo the sentiment. Due to extreme shipping delays, they anticipate, there will be a shortage of many goods on shelves, including holiday decor and toys. This isn't because the inventory doesn't exist. A shortage of workers needed to unload shipping containers at ports and a shortage of truck drivers needed to transport inventory to retailers has resulted in product not getting to where it is meant to go: store shelves.
Last-minute shoppers are likely to experience the worst of it, says Scott Grawe, chair of the department of supply chain management at Iowa State University. "Yes, you are going to see shortages," he says. "Not just on decor, but on goods. So if you're out doing holiday shopping and you're waiting until Black Friday or sometime between Black Friday and the holiday, you're going to find a lot of emptier shelves."
Unlike in previous years, waiting for end-of-season sales might not work out. Instead, experts say, get your shopping done as soon as possible.
There are many reasons behind why retailers' shelves are emptier these days, but the main one is that "the global supply chains have gotten themselves out of balance," Grawe says.
Even before the pandemic, the long, complex system that transported goods from far-flung factories across the globe onto store shelves felt precarious, experts say. And the pandemic showed just how rickety the whole thing really was, says Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
"Warehouses, stores, trucking, all throughout," Gold says. "In every state, at every point in the supply chain, there seems to be some kind of issue, and there's no one silver bullet that's going to fix everything. It's all these different components that need to all line up for the system to work, and we're just seeing breakdown after breakdown after breakdown."
The supply chain problems began in Asia, where Covid shuttered factories early in the pandemic, upending U.S. retailers' import schedules. More than 18 months later, that initial shockwave is still rippling through the supply chain.
When operations got back up to speed in Asia after those initial shutdowns, other countries, like the U.S., were dealing with their own Covid outbreaks and closures. Then there was a glut of merchandise that needed to be shipped around the world. Ports couldn't handle the volume to get back up to speed, which has led to massive delays.
Take home decor products: Most such items are manufactured overseas, and, after 18 months of feast-or-famine mentality, retailers are "fiercely competing" for containers to load their products in China for export, Grawe says. This includes not only seasonal home goods, but also general merchandise.
"If you are expecting 25 containers worth of holiday decor to arrive for your retail operation, you may only get five or six of those containers because those other containers went to other manufacturers shipping other goods."
Once those containers make it onto a boat, the next bottleneck is waiting for a spot at a U.S. port.
Despite not being able to function at full capacity because of Covid restrictions, the Port of Los Angeles processed more containers for import in the first eight months of 2021 than it did during the same period in 2019, according to data published by the Port. But that's still not fast enough to meet the amount of backlogged products, and there are now a record number of ships sitting off the coast of California waiting for their turn to be unloaded.
"To their credit, with the boxes that they're handling, they're doing their best," Gold says. But the increased volume has crippled infrastructure that has long been out of date and dysfunctional.
After containers make it stateside, the next challenge for retailers and manufacturers is finding enough drivers to move their containers around. There's been a shortage long-haul truckers "for years," Gold says, but Covid made it worse. Experienced drivers retired, and the pandemic halted trainings that bring in new recruits, says Leah Shaver, president of The National Transportation Institute.
"Of the companies that have internal training programs, 71% of fleets we surveyed that have training programs completely halted that training during the pandemic," she says. "That pipeline that brings in new drivers as folks age out or wear out was completely drained during Covid-19."
As of mid-September, more than a third, 35%, of small businesses in the logistics sector, which includes trucking companies, report having trouble finding employees for vacant positions, according to the Census Bureau's Pulse Survey. That shortage affects the delivery of both products made overseas and produced domestically, including items that many Americans are expecting as the winter holidays approach.
"When we think about turkeys and [Christmas] trees, the transportation capacity is also something that's going to play in here," Grawe says. "There is a huge demand for trucking capacity in several markets, particularly if you look at the coasts."
The compounding of delays along the supply chain will result in less product in stores this season and shipping delays of online orders. Three-to-five day shipping on USPS packages during Q3 is experiencing more delays than it was during the same period last year, according to the USPS quarterly report.
"I would guess shopping is going to be necessary at an early stage and well planned and well thought out," Shaver says. "I would be most concerned about those last minute shoppers who might not have concerns about delays in the supply chain."
Supply chain issues are unique to specific items and won't affect all products in the same way. Seasonal buys will be affected differently than general merchandise.
Supply is "looking quite good," says George Richardson of Richardson Christmas Tree Farm in Spring Grove, Illinois. "Everybody will be able to find a tree, but if you're looking for a particular type, that type might not be available in your area."
During a typical year, trees are driven from region to region. The truck driver shortage is making that more challenging. "These major growers in North Carolina, they have a lot of trees growing, but it's difficult to get a truck full of trees for everyone who wants one," Richardson says. "We may not be able to get, for example, a Fraser fir to Florida, just because of logistics and transportation and demand for them. You may not get a noble fir from Oregon down to San Diego."
Turkey shopping might also look a little different this year, says Rebecca Scheuneman, a Morningstar analyst. There is plenty of inventory, but companies including Hormel are finding it hard to predict what size turkey Americans will want this year as the delta variant might deter large gatherings.
"While the company feels that it was able to supply a sufficient number of birds, it is possible that the mix of sizes could be off, which could cause consumers to not be able to source the size of the bird they're searching for," she says.
The birds will also be pricier, she says, as the companies raise prices "to cover the inflation they're experiencing in raw materials, labor, packaging, and transportation."
Halloween costumes and decor
Costumes and decoration will make it to shelves, but perhaps a little later this season. Spirit Halloween has experienced a "delay on select inventory," says a media officer at Spencer Gifts, which owns Spirit. "It will not necessarily affect what items they see, but it might affect when they see them," he says.
The general merchandise being affected by supply chain woes include holiday gift go-tos such as books, toys, and clothes. "Right now, consumer demand for many products is quite high," says Morningstar analyst David Swartz. "Apparel demand is extremely high."
Department stores usually have a surplus of seasonal clothing, which always ends up being heavily discounted as Christmas approaches. Because inventory is "lean" this year, sales won't be as common and discounts won't be as steep, Swartz says. Most stock will sell at or close to full price.
"Pricing will be high," he says. "There is no reason to think retailers will be stuck with inventory they can't sell."
At nonclothing retailers, like independent booksellers, customers will likely have to make do with what's in stock: Replenishments won't be coming for a while.
Indie bookstores like Next Chapter Booksellers in St. Paul, Minnesota, had to make their bets months ago on what they thought customers would want this December, says David Enyeart, a manager at Next Chapter. In a more normal year, he might have made a substantial order in the early summer and then re-upped his supply of best sellers right before the holiday season. That second order "has gotten a lot harder," Enyeart says.
"So what we're doing to respond is just bringing in larger quantities initially," he says. "So, starting with bigger quantities of books that we've identified that are probably going to be big for us, we're just taking a bigger chance on them."
To compensate for running out of best sellers, Enyeart says Next Chapter has also stocked up on ancillary bookstore gifts, like puzzles and games.
Despite the broader concerns about staying stocked this holiday, he isn't overly worried. "It's a challenging time, but it's not as challenging as last year," Enyeart says. "It's doable."
The supply chain issues will likely go on even past the holiday season, Grawe says. "We're looking well into next year before we get things back into balance," he says. "That's assuming that we can at some point get the delta variant back under control and people to work at a normal pace."
This means that the earlier you shop for the holidays, the more likely you will be to find what you need, says Kristin McGrath, senior editor and shopping expert for RetailMeNot. Retailers will be pushing shoppers to get to stores early, and this year it's "not just a gimmick," she says.
"Shopping in December is going to be really risky this year, not just because of delays in getting your stuff, but because of retailers' ability to restock throughout December," she says. "Stuff that sells out early might not come back in stock in time for you to buy it for the holidays."
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