This year, as children around the world write their Christmas lists, Santa has more to consider than whether they have been naughty or nice. Some of the season’s most popular items, from bikes to the Nintendo Switch, are in short supply across the UK, Europe and US.
To see what’s going on, we follow an imaginary toy from factory to Christmas tree to illustrate the pinch points in the manufacture and supply chain that will affect presents this year.
“You’re not going to walk into a toy shop and find completely empty shelves,” says John Baulch, the publisher of Toy World magazine. “But if your child made a Christmas list and said I want one particular Barbie doll, you go to shops – it might not be there.”
Though it’s not unusual for one or two toys to sell out at Christmas, the toy industry is normally very stable, says Frédérique Tutt, a toy expert at the market research company NPD Group. But the sector has suffered from the same unexpected surge in demand, crash in production, shortages and supply chain problems that have affected all consumer goods during the pandemic.
As lockdowns shut schools and cancelled holidays, consumers in the west have been buying toys at an unprecedented rate – global toy sales are up 27% in the year to September, compared with the same period in 2019. “We’ve never seen this before,” says Tutt. “This alone is a struggle for toy companies.”Economists expect supply chain disruption to gradually fade next year, but the issues will not be fixed in time for Christmas. And people may notice price rises as well as shortages. Inflation – the measure of price growth for goods and services – is soaring around the world as a consequence of supply chain problems.
Our imaginary present is a deluxe interactive toy house complete with a puppy, named Snowflake. We’ve called it Snowflake’s Lodge. Specially designed for this article, it has a lot in common with some popular toys on this year’s Christmas lists.
Tutt knows of toy companies organising airlifts to get products from Asia to shops in Europe and the US. In one case a toy retailer resorted to shipping products from China without packaging, says James Zahn, a senior editor at Toy Insider. “They’ve done that to fit more product in those containers, then it arrives in the US and then they package it here. But they can’t keep doing that forever.”
Let’s say Snowflake’s Lodge makes it to Shanghai, the world’s biggest port, and gets into one of the 43.5m containers that pass through every year.
But container space is only part of the problem with global shipping.
Stuck in Shanghai: port problems in China
Ships arriving at Chinese ports face a one- to three-day delay in berthing. And that’s consistent across all Chinese ports, says David Gonzalez, an analyst with the consultancy firm Gartner.
“You could say one- to two-day delay to one ship is no big deal, but a one- to two-day delay to 50 ships becomes a significant deal because of the knock-on effect – you have another wave of ships waiting to arrive behind those.” Approximately 150-200 container ships arrive at Chinese ports every day.
China’s no-tolerance approach to coronavirus has caused part of the disruption, with whole ports shut for a single case, but the problems at Chinese ports now go far beyond China.
Shipping: what went wrong?
Ninety per cent of all the products we consume have been on a ship at some point, says Gonzalez.
But during the pandemic, ships began to miss ports where there was a lockdown or a staff shortage, introducing unpredictability about when or whether a ship would arrive. That accumulation of unpredictability in many places has snowballed and set the whole system off-kilter.
Add in the surge in demand from consumers in the west and it has been enough to plunge this critical piece of global infrastructure into chaos.
Backlogs: port problems in Britain
With shipping in chaos, it’s not a surprise that ports in Britain have problems.
“In an ideal world, as one ship leaves the port, another one is scheduled to arrive,” says a spokesperson for Britain’s biggest port, Felixstowe. “But at the moment all the schedules are completely shot – ships are arriving at random, and they are almost all late arriving,”
British ports have an extra problem, too: once the goods arrive, they have nowhere to go. Shortages of lorry drivers and warehouse space have made it hard to move goods around Britain. Previously, containers stayed at the port for about four and a half days. Now it’s nearer to 10.
Once Snowflake’s Lodge gets to the UK, there’s a whole other set of problems ...
Snowflake’s Lodge may have made it but serious systemic problems remain with global supply chains.
Although these issues are expected to fade, the emergence of the Omicron variant has raised the prospect of disruption being around for much longer.