When the carrot does not work, use the stick. It appears, according to this story on NPR, that the "stick approach" worked in helping to start unclogging the Ports of Los Angeles and Long Beach and finally seeing some significant freight movement. Imposing fines of $100 per day per container after so many days and increasing the amount by an additional $100 per day proved a significant enough incentive to get shipping companies to start pulling containers out of the port facilities (see "SoCal Port Congestion").
It appears that shipping companies had been using the port facilities for storage of excess containers for free rather than hauling them off to their own facilities which would cost. The number of ships waiting off the coast for unloading also dropped from around 110 to between 50-60, a significant drop but still a far cry from the one to two ships typically offshore waiting to unload during pre-pandemic times.
Unfortunately, the drop in ocean freight rates is matched by a jump in air freight rates in the past month, according to The Lodestar. We certainly will not see the problems with the supply chain straighten out in time for Christmas as we are too close to Christmas to see things get back to normal even if the problems all got fixed tomorrow, and I don't think many gaming companies have the money to airlift products in as Ty did for Beanie Babies this year. According to Gifts and Decorative Accessories, Ty spent between $225 to $300 million airlifting its Christmas supply of Beanie Babies from China to the U.S. this fall. Still, if things slowly straighten out, we may see the supply chain get back to something resembling normal by Q1 of 2022.
I really do wish companies would move their special events to other times of the year than December. Both Wizards of the Coast with its Magic: The Gathering Store Championships and Konami's Yu-Gi-Oh! Holiday Charity Can Tournament, and probably a few other events that I missed, scheduled events for early December. As I mentioned last week (see "Rolling for Initiative -- Mastercard"), while I appreciate the thought of companies helping to drive traffic into the stores and put butts in seats, this is not the time of year we need help in doing so.
The typical retail store does about 40% of its sales during the last quarter of the year. We already have lots of people coming through the door looking to buy stuff and our staffs are already under a lot of stress. I heard from one store owner whose store manager melted down and walked out this past week and employees have been very hard to keep all year. Events are good, company-created and -prized events are great but pleeaaase schedule them during slower times of the year.
Do you like company events during the holidays? Let me know in comments or via email at firstname.lastname@example.org.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
ROLLING FOR INITIATIVE -- WHEN THE CARROT DOES NOT WORK FOR CLEARING PORT CONGESTION, AND PUBLISHERS WHO SCHEDULE EVENTS DURING THE HOLIDAYS
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Posted by Scott Thorne on December 6, 2021 @ 3:37 am CT
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