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Over the past two years, the global supply chain has been struggling to keep up with unprecedented demand, from the panic buying season of early pandemic days (ah, memories) to political disruptions to the U.S postal service. For so many reasons, 2020 was a tough year for everyone, including those who pack, ship and deliver everything we use on a daily basis.
And then? The situation has gotten even worse in 2021, with constant stress tests slowing down trade. From the Suez Canal disaster back in March to labor shortages, backups at key ports throughout the United States and manufacturing difficulties throughout Asia, the global supply chain is seriously suffering. It’s all coming to a head just in time for the busiest shopping season of the year, which is making brands, retailers and consumers all ask themselves the same question: what happens to the Christmas season if the best Christmas gifts aren’t available to buy, sell or gift?
We’re here to prepare you for another unique holiday season and guide you through the current obstacles to getting the gifts you want, and getting them on time. We’ve gathered together expert advice on everything from the supply chain delays themselves to which retailers are struggling, and hopefully answered many of the most common questions consumers have as they prep for gift-giving during the pandemic.
In general? If your biggest concern is getting gifts in time for Christmas, then there’s no reason to panic. Prepare, shop early and you’ll probably be fine. The biggest piece of advice we heard was to not wait until the last minute.
In this post, we’re going to cover:
- What’s causing shipping delays?
- How will holiday shopping be impacted?
- Which brands are retailers have been affected by shipping delays?
- What can retailers do to avoid delays?
- How to make sure you get Christmas gifts on time
- The holiday shipping deadlines for USPS, Fedex, UPS and other carriers
What’s Causing the Current Supply Chain Challenges and Shipping Delays?
There are many factors that have led to the current supply chain difficulties, including changes in consumer behavior, increased demand, COVID-related labor shortages and material shortages. Shipping containers that once cost around $3,200 for companies to use now run for over $20,000, and once you get your inventory unloaded it’s unlikely there’s going to be enough truckers to deliver those goods to the shelves where consumers can buy them.
Brian Rainey, CEO of Gooten, a company that operates a smart supply chain for brands, attributed some of the delays to variables like raw materials, and labor shortages across industries.
“U.S. ports continue to see record-breaking backups due to COVID-related protocols and labor shortages. Raw materials that are still on the water could be delayed and create shortages and stockouts that will ripple across many product categories,” said Rainey.
“Labor shortages are widespread overseas and in the US across all industries, from retail and restaurants to manufacturers and freight carriers. The impact of the new vaccine mandates here in the U.S. could also cause a labor crunch in the short term.”
He also described how shipping facilities are delayed once packages arrive because of COVID-related labor shortages and protocols.
“Many package delivery companies are reporting that large hub facilities are still operating well below capacity even as demand is surging, due to labor shortages and social distancing requirements.”
He went on to say that “The COVID-19 pandemic certainly skewed consumer purchasing behavior, increasing online product demand. Other macroeconomic factors such as global trade issues, labor shortages, and environmental changes are also affecting supply chain issues.”
How Will the 2021 Supply Chain Issues Affect the Holiday Season?
No company is immune to the current issues, since everyone relies on roughly the same infrastructure to ship and deliver goods worldwide. Isaac Larian, CEO of MGA Entertainment, told CNBC that container ships filled with goods have been bottlenecked off the coast of Los Angeles for months, waiting to be unloaded. Larger companies like Home Depot and Costco have contracted their own dedicated container ships for expediting huge orders from Asia, Europe across the globe. Hasbro has almost doubled the number of U.S ports they’re using, as well as adding a few in Asia.
“It’s a really, really complex set of problems that has a chain effect, and I’m afraid this will continue for a long time,” Larin told CNBC.
Hasbro CEO Brian Goldner told CNBC that the company “expects some toys will be delayed, arriving in the beginning of the fourth quarter instead of the end of the third, but toys will be on shelves in time for the peak shopping season, he said.”
Other large retailers have also defaulted to an attitude of confidence, rather than worry, for the upcoming holiday shopping surge.
When asked for a comment, Amazon responded with a relatively neutral statement about the state of its delivery infrastructure in the face of increased demand. Reassuring, coming from a brand whose shipping perks have made it an indispensable resource for many Americans.
“We work with suppliers to ensure we have robust inventory with competitive prices across all categories in order to meet our customers’ needs, not only during the holiday season, but every day. We’re excited for the 2021 holiday shopping season and look forward to delighting customers with low prices, vast selection and fast shipping on every order,” an Amazon spokesperson told SPY.
Which Brands Are Likely to Be Most Affected?
The truth of the matter is, large retailers like Home Depot, Costco and Walmart are going to have an easier time putting inventory on shelves than smaller businesses, because they have the money and resources to charter extra shipping containers and pay the increased shipping costs.
According to S&P Global Market Intelligence, aggregate import prices have increased during 14 out of the past 15 months, and show little sign of slowing down. Shipping rates also increased 0.5% during August, and were up 18.9% in Q2 over Q1 of 2021. Bigger companies can not only pay these increased fees, but can also hire more people to strategize and maneuver within the system to keep things flowing.
CEOs of major brands like Best Buy, Nordstrom and Gap Inc. have been preparing for this busy time all year long, and are optimistic that their creative tactics will mitigate the effects of the worldwide delays. Smaller brands and businesses that rely on shipping costs staying at a certain level are inevitably going to have a harder time.
Corie Barry, Best Buy CEO, explained to Retail Dive that “There will continue to be challenges, particularly as it relates to congested ports and transportation disruptions, but our teams have set us up for as strong an inventory position as possible as we move forward into the back half of the year.”
What Can Retailers Do to Minimize Disruptions?
Rainey had some helpful advice for retailers worried about stocking their shelves with inventory and having enough to meet the holiday shopping demand.
“Incentivize customers to get orders submitted early again this year. Last year there was a lot of press around the impending ‘shippagedon’ package delivery problem ahead of peak holiday season. While we don’t anticipate the shipping crisis will be as bad, it is best to allow as much time as possible for manufacturing and delivery given the combination of various macroeconomic factors happening, including labor and material shortages and possible carrier delays,” said Rainey.
“Education and awareness will be important. Setting expectations is incredibly important in mitigating customer frustrations. Ensure your product fulfillment and shipping times are accurate across your website and emails you send out to customers.”
What Should Holiday Shoppers Do to Get Their Gifts on Time?
The overwhelming consensus among shopping experts, industry specialists and brands big and small? Get your holiday shopping done EARLY. Rainey said “Don’t wait until the last minute to buy gifts! Get your holiday shopping done as early as possible to avoid potential shipping delays.”
Trae Bodge, Smart Shopping Expert at Truetrae.com, had plenty of advice for shoppers navigating the upcoming holiday season. Bodge shared that while shopping early is certainly advantageous from a timing perspective, you are potentially missing out on holiday deals and sales that go live around Black Friday and Cyber Monday.
“To avoid stock issues and shipping delays, I would recommend that consumers get at least some of their shopping done early. They’ll get their goods on time, but by shopping early, they’ll miss out of some of the exciting deals that retailers typically offer around big shopping days, like Black Friday and Cyber Monday,” said Bodge.
Thankfully, we’ve got you covered in the Black Friday/Cyber Monday department, and will be continuously updating our deals content throughout the holiday season.
When Are the Shipping Deadlines for the Major Mail Carriers?
In case you’re planning on shipping your gifts to loved ones this season, here are the deadlines for shipping with major U.S mail carriers.
- FedEx Ground Economy: December 9th
- FedEx Ground Shipping: December 12th
- FedEx Express Saver: December 21st
- UPS Ground Shipping: December 16th
- UPS Next Day Air & 2nd Day Air: December 18th
- UPS 3-DAy Select: December 19th
- USPS Retail Ground Shipping: December 15th
- USPS Media Mail: December 16th
- USPS First Class Mail: December 18th
- USPS Priority Mail: December 19th