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Toymakers Warn Supply-Chain Issues Are a Threat to Holiday Shopping

Covid-19 has caused a massive bottleneck in the global transportation pipeline.

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Don’t wait to do your holiday if toys from today’s biggest brands are on your list: Toys will be more expensive this holiday season — and harder to find. 

The shortage is due to significant challenges within the global transportation pipeline, CNBC reports. Covid-19 has led to a massive labor and supply shortage, which was worsened by the blockage of the Suez Canal in March

Container ships idle at U.S. ports, full of that has yet to be unloaded — there simply aren’t enough workers to get the job done. 

Toy executive Isaac Larian, CEO of MGA Entertainment, says shipping containers that cost $3,200 prior to the pandemic go for upwards of $20,000 today. MGA had expected 50% sales growth this year, but now anticipates just 18% to 20%. 

Power outages in China, a resin shortage and higher labor costs have further complicated matters and caused prices to climb. 

“It’s a really, really complex set of problems that has a chain effect, and I’m afraid that this will continue for a long time,” Larian said.

Related: A List of All of the Shortages in U.S. Economy, From Diapers to Cars

Retailers will be hit hard if merchandise isn’t on shelves in time for holiday shopping, as sales plummet significantly after the December 25 deadline. It will also negatively impact toy companies, which will find it difficult to move more inventory when retailers still have warehouses full of it. 

Salesforce predicts a 20% increase in prices this holiday season, and according to Today, KPMG expects a 7% increase in holiday sales for U.S. retailers, almost double the historical annual growth rate. That means shoppers must get in early if they want to find the gifts on their lists. 

“If your kid has their heart set on something, go buy it now,” said Steve Pasierb, CEO of the Toy Association. “Don’t wait.”

Of course, toy companies aren't the only ones affected by the thwarted , but giants like Home Depot and have the resources to find workarounds: going so far as to contract dedicated container ships to expedite their orders. 

Amanda Breen

Written By

Entrepreneur Staff

Amanda Breen is an editorial assistant at Entrepreneur.com. She is a graduate of Barnard College and recently completed the MFA in writing at Columbia University, where she was a news fellow for the School of the Arts during the 2020-2021 academic year.