“Dramatic” increases to container prices are threatening toy prices at Christmas, according to The Entertainer.
A shortage of containers has resulted in container costs increasing ten-fold throughout the pandemic, with prices rising from $1,500 for a 40-ft container to $14,000-£18,000 per container, according to The Entertainer founder Gary Grant.
Grant told Supply Management a “perfect storm” of rising costs and shortages of shipping containers meant Christmas toy prices were set to increase by 10%.
The Entertainer currently has around 200 containers of stock stored in China which cannot be shipped to the UK due to Covid-19 disruptions, reducing the stock of empty containers.
Grant said the company was only able to move around half the usual number of containers per week due to container shortages.
“We're just not able to get the number of containers that we want,” Grant said.
“There's a shortage of empty containers in the Far East. So we've got the main shipping lines dramatically increasing prices, but also shortage of containers.
“It's a perfect storm. You've got an increase in material costs, increase in shipping costs, and a shortage of containers. So even if you weren't paying the higher prices, you can't necessarily bring in the volume of quantity that you would otherwise have wanted.
“It's for all of those reasons, we're concerned there's likely to be more shortages of toys this Christmas than there have been in many recent years,” he said.
Grant said he expects to see further price hikes next year with logistics issues persisting for a further 12 months. “You are definitely, definitely going to see inflation in toy prices,” he said.
Geoff Sheffield, chief commercial and marketing officer for The Entertainer, said issues had been compounded by the HGV driver shortage in the UK, and most brands are being impacted.
The Road Haulage Association estimates there is currently a shortfall of 100,000 drivers in the UK due to Covid-19 pandemic delaying HGV driver tests and EU drivers forced to return to the EU following Brexit.
Sheffield said: “The reality is that any item that sees a surge in demand is likely to be short this year. What is important to emphasise is that there won’t be a shortage of toys and stores with empty shelves, it will just potentially be a different mix of products than envisaged.”
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