Logistics Part II: The Global Shipping Crisis Doesn’t Care About Your Hobby

Posted by Bret on 07/20/21 at 07:05 AM Category: Vintage Collection

https://www.banthaskull.com/images/news/container_ship.jpg

Last week, we discussed some of the logistics involved with Big Retail, and why it may be currently unrealistic to expect them to reliably ship our collectibles so that they arrive in mint condition. Today, we'll take a look at a huge reason why there have been, and will continue to be, so many delays with new product arrival dates.

We've all seen it happen to our preorders. Collectibles that were announced months ago and were due to arrive by now, have been delayed by several weeks, months, or worse. I had ordered some extra VC179 The Armorer figures from Hasbro Pulse, which I believe were scheduled originally for April delivery, and then were pushed to July. Now a check on Pulse shows February, 2022. I had hedged my bets and ordered a couple each from BBTS (which delivered a few weeks ago after being pushed from April to June) and Entertainment Earth (which just delivered last week after also being pushed to June, and now says January, 2022.). I also watched my single figure orders from EE for the Fan Channel Battle Droid as well as most of the Gaming Greats figures get pushed to later this year or into 2022. Beyond Hasbro, my Sideshow Captain Rex has been delayed from Q2 of this year until Sep/Oct. And while my Rebels Captain Rex bust from Gentle Giant has not yet been delayed past its expected Q3 arrival, the website warns of continued shipping delays across the board for many products.

Gentle Giant's website has a banner across the top that warns of widespread shipping delays out of China's Yantian Shipping Terminal.

Companies from Under Armour (UA) and Hasbro (HAS) to Dollar Tree (DLTR), Urban Outfitters (URBN) and Crocs (CROX) have all warned about the supply chain crunch recently, pointing to container shortages, port congestion, rising shipping costs and logistics challenges.[4]

The global shipping network was already taxed and struggling to keep up with the world's economy prior to the pandemic, but COVID-19 threw everything on its head. While the effects are widespread and complex, one of the main problems is the lack of availability of shipping containers, the large metal boxes that are ubiquitous at shipping terminals, in railroad freight yards, and on long-haul trucks across our highways. They are the workhorses of the shipping world, and without them, we have gridlock. Early on during the pandemic, a large number of containers were used to deliver much needed medical supplies all over the globe. Due to the demand of such vital supplies, there was not the typical turnaround time available for ocean freighters to wait for containers to be emptied, or to take on a load of empties for the return trip. Many empty containers were left at their destinations, and not recycled into the pipeline, as freighter ships moved quickly to their origin ports to pick up more freight.

Shipping Containers - They're boxy, but they're good.

It’s estimated that there are more than 170 million shipping containers across the globe, used to transport around 90% of the world's goods. Yet, the effects of Covid-19 have left global shipping lines with backlogs and delays due to labor shortages, reduced capacity in logistics systems, congestion at ports as well as quarantined cargo. This means China doesn’t have enough available containers to meet demand.[1]

All around the world, empty shipping containers are in the wrong place. They are in the countries that receive cargo, like Australia. They need to be in the places that send cargo, like China. [2]

Containers that carried millions of masks to countries in Africa and South America early in the pandemic remain there, empty and uncollected, because shipping carriers have concentrated their vessels on their most popular routes — those linking North America and Europe to Asia.[2]

A huge amount of our products are made in, and shipped from, Asia - China most specifically. For a short time at the beginning of 2020, manufacturing, warehousing, and shipping sites across Asia were shut down. But they were quickly reopened as demand for critical goods exploded. More and more consumers, mostly in North America and Europe, began to shift spending habits based on working from home. Ocean freight companies leveraged these shipping routes to make the most money by meeting the most demand. Fewer trips were being made on the less travelled routes to Africa, South America, or even Australia. And even when freighters did make the trip, there had been, and continues to be, no priority given to loading empty containers back on the ships. The turnaround time is so tight and demand for actual goods is so high it has not been worth the time to stay longer to load them. This shortage of empty containers in Asia is causing a huge problem, resulting in jammed factories and warehouses.

Container shortage isn't the only thing that is plaguing (no pun intended) global logistics. In March of this year, one of the largest container vessels ever built, the Ever Given, ran aground while transversing the Suez Canal on it's way from Malaysia to Rotterdam. It was stuck for 6 days, before being freed on March 29th. It was then seized and impounded for investigations and legal disputes, before finally being released to continue on it's intended journey, on July 7th. Obviously the freight on board was massively delayed, but it wasn't just localized to the Ever Given…

As of [two days before the rescue], there were 369 ships stuck in a tailback waiting to pass through the 193km (120-mile) canal on either side of the blockage....Some vessels have been rerouted to avoid the Suez Canal. That is adding around eight days to their total journeys.[3]

Obviously someone triple dog dared this captain to try to make it through the Suez Canal, and he got stuck.

This incident alone would have caused a significant disruption to global trade, but during the pandemic, its effects were multiplied.

In North American and European seaports, there are massive traffic jams caused by the high demand of imports. Ships are often needing to wait days or weeks for the opportunity to dock and offload (delaying their return trips to Asia - with or without empty containers). The jams are causing ships to anchor off the coasts away from the ports, and then when those off shore anchorages become full, ships are forced to float in holding patterns further out to sea.

Like going to a North Jersey mall on Saturday, there's no place to park, so ships float around waiting for a spot to open at the Port of Los Angeles.

Sadly, as we appeared to be on the brink of ending the pandemic, COVID-19 variants and some countries' inability to get their citizens vaccinated has led to increased cases across the globe, and this sometimes hits logistics efforts directly. Recently, an outbreak at Yiantan Shipping Terminal, one of China's busiest ports, caused a partial shutdown, further exacerbating the issue. Manufacturers, ports, and freight companies continue to grapple with labor problems that have arisen from COVID, as well as altered processes to help keep workers safe - while subsequently slowing down productivity in many cases.

...the infrastructure to handle the flow of goods, in the form of shipping containers, ports, terminals, ships, underwater access channels and turning basins, cranes, hard stand and so on, is comparatively static. Yes, more equipment and infrastructure can be built but it takes a lot of time and money to do so. [2]

Yiantan Shipping Terminal in China was recently shut down due to a COVID outbreak. Our toys might be stuck there, probably in the 1247th container from the left.

The super-heated demand for goods, the shortage of containers, the lack of enough dockworkers, resurgence of COVID-19, and congestion at ports around the world have conspired to create a shipping crisis perfect storm that is delaying goods for weeks and months. Besides the obvious concerns with critical items such as food, water, medical supplies, etc., it's also causing issues with home building supplies (lumber, metals, and drywall) as well as computer chips for cars and electronics.

Near and dear to you if you are reading this, it also most certainly is impacting deliveries of our collectibles. Some analysts believe that the worst is behind us, but others are predicting many more months of delays and hardship. On the toy front, there is some concern that these issues will not be resolved any time soon, and they could be a major shortage of toys for the upcoming holiday season. Could the Razor Crest be in danger of failing to meet its fall 2021 delivery time frame?

There may be fewer boxes under the tree this holiday season, as toymakers grapple with the possibility of a massive shortage in everything from dolls and action figures to vehicles and puzzles.[5]

No one knows how long the upheaval will last, though some experts assume containers will remain scarce through the end of the year, as the factories that make them — nearly all of them in China — scramble to catch up with demand.[6]