Chinese state media on Friday said Americans might see fewer fireworks on the Fourth of July because Chinese-made fireworks are “caught up in the global supply chain disruption resulting from the pandemic,” but with half a year to go until Christmas, “much-needed goods” from the “world’s factory” in China should make it to the U.S. and Europe on time.
China’s state-run Global Times quoted Liuyang Firework Exports Association president Wen Guanghui explaining that orders for fireworks from the United States are up 30 percent from 2020, but “transportation pressure” and prices for shipping containers skyrocketing by three or four hundred percent are making it difficult to fill the orders.
According to the Chinese fireworks industry, not enough shipping containers are available to move all their products, and when cargo capacity can be found, shipping costs can exceed the value of the merchandise. Furthermore, production was slowed by heatwaves in China, which raised safety concerns.
The Global Times quoted “market insiders” and the American Pyrotechnics Association (APA) to estimate that U.S. fireworks consumption reached four million pounds in 2020, and up to 95 percent of it comes from China. The APA believes up to 30 percent of the Chinese fireworks ordered by American retailers are stuck in either Chinese or American ports, or on ships at sea.
In a somewhat contradictory coda to the article, “market watchers” quoted by the Global Times conceded that China’s export volume of fireworks has actually been decreasing every year sincere 2018, with a 20-percent drop in 2020, but they insisted China still has influence over the American market because “it is extremely difficult for U.S. importers to find replacements” that “have the same quality” as Chinese fireworks.
Another Global Times article said the same supply chain disruptions could make it difficult for China to ship Christmas and Halloween merchandise to Europe and the United States, and early orders are already piling up.
China’s factories are reportedly ramping up to ship the holiday goods early to Western buyers, while the shipping industry struggles to resume operations after the Wuhan coronavirus pandemic:
Since last year, ports in Europe and the US have been affected by the coronavirus, resulting in the slow return of empty containers. This was intensified by the aftermath of the Suez Canal blockage in March and the recent backlog in Yantian Port. Combined with a strike at some US ports, ships have been delayed, ports are congested and containers remain difficult to obtain.
About 10,000 to 15,000 containers are stranded in California and more than 50,000 empty containers are piled up at Australian ports, media reports said.
The container shortages have devastated sea transport, with freight rates tripling compared with the same period last year, industry insiders said.
Container shipping has become so expensive that trains from China to Europe have “become a preferred choice for more traders this year.” Rail transport from China to European destinations has always been cheaper, but sea transport was only half the cost until the pandemic caused container prices to explode.
The Global Times added that trains might be faster, but they are also much smaller, so there are logistical hurdles to overcome.
“A ship can carry 10,000 to 20,000 standard containers but a cargo train can only carry 50,” the Chinese state paper observed.
Fireworks and holiday decorations are not the only products to be affected by the shipping shortage. An unusual holiday season could be shaping up, as consumers emerging from the shadow of the pandemic look for big Christmas bargains, only to discover 400-percent or even 500-percent increases in shipping costs affecting the price of everything from toys to coffee and gourmet food, especially products from faraway China.
One previously booming holiday industry looking at Christmas 2021 with trepidation is board games. Board games have become very popular, with rules and presentations much more elaborate and polished than old mainstays like Monopoly, and increased price tags to match – many of the most popular games retail for $60 and more, and some are well over $100.
The hobby took a massive hit during the pandemic since people were nervous about getting together to play the games. Just as the industry is poised for a big comeback in the 2021 holiday season, those huge shipping costs and supply chain problems are looming. Board games tend to rely on Chinese manufacturers for their components, so short supplies and price hikes on already expensive items could disrupt plans for an industry comeback this Christmas.