Price rises and shortages of goods for the holidays threaten Europe and America due to disruptions to global production and supply chains related to the coronavirus pandemic. The Washington Post estimated that “the delta variant stole Christmas,” with many importers placing orders with Chinese factories earlier than usual.
The supply chain crisis has lasted for months and most analysts do not expect a quick solution to the problem. According to Bloomberg, “Christmas is at stake” and the Guardian in September warned Australians that due to the “dramatically bad” supply situation, they should do their Christmas shopping in advance.
“There is a chance that some products will be missing in Europe during Christmas, but not only. Prices will definitely increase due to the increase in production costs, as well as transport costs and longer delivery times. The purchasing power of the euro is also declining “- a manager from the Cantonese office of one of the largest logistics companies in the world, who does not want to disclose his name due to the company’s press policy, assessed in an interview with PAP.
The cost of shipping one 40-foot container from China to Europe has jumped from last year from approx. up to 15-20 thousand dollars. It has dropped somewhat recently as governments put pressure on shipping companies, but with the current port congestion, it is unclear how long transport prices can remain frozen, the researcher said.
Some producers and importers are sounding the alarm, believing that the current supply crisis may lead to shortages. “I’ve been in this industry for 43 years and I’ve never seen it so bad. Anything that could have gone wrong went wrong at the same time, ”Isaac Larian, founder and CEO of MGA Entertainment, one of the world’s largest toy manufacturers, told Bloomberg.
The list of disruptors to global supply is long. In recent months, covid restrictions have limited the work of Asian factories and the operation of key container terminals on the Chinese coast. This additionally hit maritime transport, already struggling with congested ports, shortage of containers and the effects of the March blockade of the Suez Canal. Some Chinese factories are dealing with electricity rationing.
Meanwhile, shortages of some consumer goods began to appear in the West. The severe shortage of integrated circuits forced downtime in the production of electronic components, which in turn hit device manufacturers and automotive companies. The waiting time for new cars has increased, and some manufacturers are delivering unfinished models to showrooms without features such as touch screens or satellite navigation to satisfy impatient customers.
“Some children will certainly cry this holiday season,” Joel Bines of the consulting firm AlixPartners told the Financial Times. In his opinion, the shelves will not be empty, but stores may have difficulty obtaining the most sought-after goods.
The owner of the import and export company ChinaWay, Lech Lipiński, told PAP that importers expected delays in deliveries and placed orders for Christmas goods well in advance this year. “I am not afraid of empty shelves or shortages on the market. Whether everything will be available is a slightly different question. I believe that everything necessary will be available, ”he assessed.
“Toys, electronics is such a diverse category that the choice will probably be smaller than a year or two ago, but it will still be. We imported the toys much earlier, with the holidays in mind in the context of import difficulties. We ordered Christmas lights in June, three months earlier than usual, and they have already arrived in Poland, ”Lipiński added.
However, prices will be higher, both due to the longer delivery times and the increase in delivery costs, as well as inflation and the decline in the zloty exchange rate against the dollar, which is where Chinese exporters account for. “This gives an increase of 15 percent from the very beginning. While at the beginning of the pandemic the warehouses were still full and we were referring to the old order values, now we are in a new, more expensive reality ”- assessed the entrepreneur.
Andrzej Borowiak from Canton