Shanghai Lockdowns & Looming Union Negotiations Present New Challenges for U.S. Toymakers
April 28, 2022 | With new data from shipping analytics firm Windward finding 25 percent of container vessels globally are waiting outside a congested port and roughly 28 percent of those are in China, The Toy Association is closely monitoring how the fourth consecutive week of lockdowns in cities like Shanghai (facing the city’s worst COVID-19 outbreak since the onset of the pandemic) is creating a ripple effect across the global supply chain and impacting the toy industry.
In China, ongoing lockdowns have affected cargo moving out of the country with officials suggesting manufacturers should brace for potentially months of delays and increasing associated costs. Shanghai, which serves as a major hub for toy exports and other consumer goods, is just one example; according to the Journal of Commerce, in addition to labor and trucking shortages at the Port of Shanghai, cargo ships are being diverted to the neighboring Port of Ningbo-Zhoushan, which is facing increased congestion and vessel wait times as a result. Airfreight has also been crippled and officials warn that the upcoming national five-day Labor Day holiday beginning on April 30 could further hinder cargo movements.
These delays are also resulting in increased backlogs and shortages in the U.S. As the Journal of Commerce recently reported, high volume imports from Asia are being diverted from the West Coast due to the ongoing congestion there. Similar to what’s unfolding at China’s ports, diversions are putting increased pressure on East Coast terminals.
Additional cargo is being diverted to the East Coast ports to guard against possible labor actions during the upcoming contract negotiations between the International Longshore Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) in May. As of now, a positive outcome of those negotiations is expected, according to ILWU International President Willie Adams.
“The Toy Association continues to engage with port officials and lawmakers to keep the play community informed of the latest developments affecting supply chains, and we encourage any member companies that are impacted to reach out to our team for assistance,” said Ed Desmond, executive vice president of external affairs at The Toy Association. “We are doing everything in our power to help members get their products on shelves as quickly as possible and to ensure they have the information they need to prepare for the holiday season.”
On June 2, The Toy Association will host a webinar with officials from the Port of Savannah, the first in a series to offer members insights and outlooks on key U.S. ports leading up to the critical fourth quarter. Additional webinars with leaders from ports in Texas and Virginia will follow in the coming months.
Members are also encouraged to bookmark The Toy Association’s Shipping Crisis Resource for the latest updates on supply chain issues.