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Global Trade Is A Mess, And Peak Shipping Has Just Begun

“I’ve been doing this for 43 years and never seen it this bad... Everything that can go wrong is going wrong at the same time,” said Isaac Larian, Founder and CEO of MGA Entertainment, when asked about Covid-19’s supply chain disruptions.


The effects of Covid-19 on the supply chain have been snowballing since factories slowed output or closed down entirely in 2020. Events like the Suez Canal blockage, labour shortages, and raising transportation costs have retailers raising alarm bells for the holiday season.

Companies are dealing with shipping issues stemming from a range of sources.

Increasing demand for shipping containers has created a shortage, causing the prices to rise from $2,000 to $20,000 per container.

At just one factory in Shenzhen there are roughly $8 million worth of finished goods waiting to be shipped. Even when inventory is able to ship, the labour shortage is causing record backlogs at ports, which further delays inventory from arriving at stores.

Retailers are seeing their margins shrinking. As a result, consumers will see prices increase while selection decreases. Analysts are estimating that we'll see an increase in experiences, services, and gift cards as Christmas presents this year.

To combat the disruption, retailers are encouraging consumers to start their holiday shopping early and are trying out new, creative methods. This includes things like live-streaming on their websites in an attempt to break consumer habits of shopping last minute, and of waiting for those holiday promotions.

As the folks at Bloomberg so lovingly put it: "Global trade is a mess, and peak shipping has just begun."

**Sighs in Christmas**

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