The president of the Toy Association has warned that the cost of children’s gift will rise by ten percent this year amid a crisis at America’s ports.
Toy Association President Steve Pasierb said the record backlog at California‘s ports, where 36 percent of US imports come from, will take until mid-2022 to clear – leaving many parents unable to find gifts over the holiday season.
He told Fox News on Wednesday that industry that is projected to be the most impacted by the shortage of goods is the toy industry.
‘It’s hitting us at the worst time of the year, which is the holidays,’ Pasierb said.
Pasierb added that it’s going to take until the end of next year’s financial second-quarter to solve the crisis at the California ports, particularly in Los Angeles, dubbed as ‘America’s port’.
Thousands of containers sit, waiting to be loaded on trucks and trains, as large container ships are unloaded from the Ports of Los Angeles (pictured) and Long Beach, while dozens of large container ships wait to be unloaded offshore Wednesday
Toy Association president Steve Pasierb said some children’s gifts will cost up to 10 percent MORE this Christmas and families should plan ahead for holiday season purchases
Yesterday the White House warned that many popular toys may not get here in time for Christmas (pictured: A couple shopping for the remaining towels in an otherwise empty Home Goods department of Sears in El Paso, Texas on October 10)
Ports are also just one piece of the puzzle. The country needs more truck drivers, better infrastructure, and a supply chain that can less easily be disrupted by pandemics and extreme weather.
‘We’ve got a long, long way to go. It took us more than a year to get into this,’ Pasierb said.
The White House said it set-up a task force in June to tackle the issue, press secretary Jen Psaki told reporters on Wednesday. She went on to blame the pandemic for economic fallout, describing the situation as ‘inevitable.’
‘I can’t make a prediction,’ Psaki said about how long the supply chain bottlenecks would last. However, she said that an overnight fix on the congestion of the issue isn’t realistic.
‘The supply chain task force has been working around the clock for months and months to address a range of… different issues that we see in the supply chain… There are issues at the ports…those have been on the rise recently,’ she said.
The White House responded to the backlog by finalizing an agreement for the Port of Los Angeles to become a 24-hour, seven-days-a-week operation.
Shortages of dockworkers at ports and delivery drivers have increased shipping delayers. Pictured: Dock workers at the Port of Los Angeles leave at the end of their shit on October 13
The hope is that nighttime operations will help to break the logjam and reduce shipping delays for toasters, sneakers, bicycles, cars and more.
‘By increasing the number of late-night hours of operation and opening up for less-crowded hours when the goods can move faster, today’s announcement has the potential to be a gamechanger,’ President Biden said.
The rising costs are eating into worker pay, creating a drag on growth and driving Republican criticism of Biden just as his multitrillion-dollar tax, economic, climate and infrastructure agenda is going through the crucible of congressional negotiations.
Not to mention, the expansion of port operations was also an unspoken recognition that inflation is lingering at higher levels long after the economy began to reopen from the coronavirus pandemic.
Businesses were worrying about monthslong delays for shipping containers in June, yet the administration only formed its supply chain task force that month and named a port envoy on August 27 to address the challenge.
The President is also trying to use the predicament as a selling point for his policy plans that undergoing congressional scrutiny.
‘We need to take a longer view and invest in building greater resiliency to withstand the kinds of shocks we’ve seen over and over, year in and year out, the risk of pandemic, extreme weather, climate change, cyberattacks, weather disruptions,’ he said.
With the holiday season approaching, President Biden announced that the Port of Los Angeles will begin to operate 24hours a day in efforts to relieve the backlog in the supply chain that delivers goods to the United States. Americans have seen delays in a host of consumer goods, including electronics, cars, lumber, toys and more.
The sense of uncertainty is beginning to consume the attention of many Americans.
University of Michigan economist Betsey Stevenson noted on Twitter the ‘economy is in a very fragile and unprecedented place.’
Prices are rising at more than 5 percent, trade in goods and services have slowed and more Americans are quitting their jobs while the delta variant has made the coronavirus pandemic a risk.
‘No one really knows what’s going to happen,’ wrote Stevenson, a former member of the White House Council of Economic Advisers under President Barack Obama.
Ports in Los Angeles and Long Beach, California, account for 40 percent of all shipping containers entering the United States.
As of Tuesday, there were 64 ships berthed at the two ports and 80 waiting to dock and unload, according to the Marine Exchange of Southern California.
Commitments by the Los Angeles port’s operator, longshoremen and several of the country’s largest retail and shipping companies are expected to help relieve the backlog.
Walmart, FedEx, UPS, Target, Samsung and The Home Depot committed to unloading during off-peak hours, making it easier for the Los Angeles port to operate nonstop.
The Long Beach port has been operating 24 hours daily for seven days for roughly the past three weeks.
Cargo ships (pictured September 13) wait to dock at traffic-clogged Los Angeles ports
There were 62 ships berthed at the Port of Los Angeles (pictured) and Port of Long Beach and 81 waiting to dock and unload as of Monday
Biden also held a virtual roundtable with the heads of Walmart, FedEx Logistics, UPS, Target, Samsung Electronics North America, the Teamsters Union and the U.S. Chamber of Commerce, among other groups, before his speech.
Republican lawmakers say Biden’s $1.9 trillion coronavirus relief package has fueled higher prices.
A recent analysis issued by the investment bank Goldman Sachs estimates that ‘supply-constrained goods’ account for 80 percent of this year’s inflation overshoot, yet the political criticism continues to sting as housing and oil prices add to inflationary pressures.
Senate Republican leader Mitch McConnell of Kentucky has made inflation one of his central charges against Biden, a sign that getting prices under control could be essential for Democrats trying to hold onto congressional seats in next year’s elections.
‘The Democrats’ inflation is so bad that even though the average American worker has gotten a multiple-percentage-point pay raise over the last year, their actual purchasing power has been cut,’ McConnell said in a Senate speech last week.
‘Even dollar stores are having to raise their prices. Just ask any American family about their last few trips to the supermarket, the gas station or the toy store.
‘Heaven forbid if they’ve had to participate in the housing market or the auto market anytime lately.’
The Biden administration has argued that higher inflation is temporary. Yet the supply chain issues have persisted months after the economy began to reopen and recover as vaccines lessened many of the risks from the pandemic.
Consumer prices climbed 5.4 percent from a year ago, the Bureau of Labor Statistics reported Wednesday.
That is significantly above the Federal Reserve’s two percent target. Higher energy, food and shelter costs were prime drivers of price increases in September.
The consumer price index rose 5.4 percent in September from a year ago, up slightly from August’s gain of 5.3 percent and matching the increases in June and July
Prices are up on a wide range of key goods as high inflation continues to hit US consumers