U.S., European Suppliers Scramble to Secure Christmas Goods as Cargo Delays Worsen

Suppliers to Walmart, Target, Amazon.com and other major retailers told Reuters they are placing holiday orders for Chinese-made merchandise weeks earlier this year, as a global shipping backlog threatens to leave many gift buyers empty-handed this Christmas shopping season. Reuters surveyed nearly a dozen suppliers and retailers of everything from toys to computer equipment in the United States and Europe. All expect weeks-long delays in holiday inventory due to shipping bottlenecks, including a global container shortage and the recent COVID-related closure of the southern Chinese port of Yantian, which serves manufacturers near Shenzhen. The risk for retailers is a rash of out-of-stock items just as shoppers are ready to open their wallets to splurge on toys, clothing and other merchandise. "It's going to be a major, major mess," said Isaac Larian, chief executive of Los Angeles-based MGA Entertainment Inc, which sells LOL Surprise, Bratz, Little Tikes and other toy brands to Amazon, Walmart and Target. His company has toys stuck in hundreds of containers at the Yantian port. If he can't get enough inventory for his retail clients, "it's going to hurt the Christmas sales big time," Larian said. The shipping logjams are due to more than just the backlog in Yantian, which is considered Amazon's No. 1 Chinese seaport, - accounting for 32.4% of shipments handled by the e-commerce company in the three months to May 31, according to S&P Global Market Intelligence's trade data firm Panjiva. While Yantian port reopened on June 24, a shortage of containers was still constraining full activity, globally cargo ships are overbooked, containers are stranded in the wrong places, and ports are congested. Products are piling up on factory floors, in warehouse parking lots, on seaport docks and at rail yards - threatening more backups than last year's holiday "shipageddon," when many items arrived after Christmas. Read more.