Toymakers race to get products on shelves amid supply clogs

NEW YORK (AP) -- Running out of time to get its products on store shelves ahead of the holidays, the Basic Fun toy company made an unprecedented decision: It's leaving one-third of its iconic Tonka Mighty Dump Trucks destined for the U.S. in China.

Why? Given surging prices for shipping containers and clogs in the supply network, transportation costs to get the bulky yellow toy to U.S. soil is now 40 percent of the retail price, which is roughly $26. That's dramatically up from 7 percent a year ago. And it doesn't even include the cost of getting the product from U.S. ports to retailers.

"We've never left product behind in this way," says Jay Foreman, CEO of Basic Fun. "We really had no choice."

Toy companies are racing to get their products to retailers as they grapple with a severe supply-network crunch that could mean sparse shelves for the holidays. They're trying to find containers to ship their goods while searching for alternative ports. Some are flying in some of the toys instead of shipping by boat to ensure delivery before Dec. 25. And in cases like Basic Fun, they are leaving toys behind in China and waiting for costs to come down.

Like all manufacturers, toy companies have been facing supply chain woes since the pandemic started and temporarily closed factories in China in early 2020. Then, U.S. stores temporarily cut back or halted production amid lockdowns. The situation has only worsened since the spring, with companies having a hard time meeting surging demand for all sorts of goods from shoppers re-entering the world.

Manufacturers are wrestling with bottlenecks at factories and key ports like Long Beach, California -- and all points in between. Furthermore, labor shortages in the U.S. have made it difficult to get stuff unloaded from ships and onto trucks.

But for toymakers that heavily rely on holiday sales, there's a lot at stake for the nearly $33 billion U.S. industry. The fourth quarter accounts for 70 percent of its annual sales. On average, holiday sales account for 20 percent of the overall retail industry. And 85 percent of the toys are made in China, estimates Steve Pasierb, CEO of The Toy Association.

A shipping container is moved along the Delaware River in Philadelphia, Wednesday, Sept. 29, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Matt Rourke)

A container ship is docked at the Port of Long Beach in Long Beach in Calif., Friday, Oct. 1, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Jae C. Hong)

A shipping container is moved along the Delaware River in Philadelphia , Wednesday, Sept. 29, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Matt Rourke)

A beach goer sits on the beach in Seal Beach Calif., Friday, Oct. 1, 2021, as container ships waiting to dock at the Ports of Los Angeles and Long Beach are seen in the distance. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Jae C. Hong)

Five ship to shore cranes and gangs of longshoremen work the container ship CMA CGM Laperouse at the Georgia Ports Authority's Port of Savannah, Wednesday, Sept. 29, 2021, in Savannah, Ga. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Stephen B. Morton)

Ship to shore cranes work the container ship CMA CGM Laperouse at the Georgia Ports Authority's Port of Savannah, Wednesday, Sept. 29, 2021, in Savannah, Ga. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Stephen B. Morton)

Masters of the Universe figures, by Mattel, are displayed at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)

A Barbie Dream House is displayed at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)

Polly Pocket figures are displayed at the TTPM Holiday Showcase, in New York, Thursday, Sept. 23, 2021. With three months until Christmas, toy companies are racing to get their toys onto store shelves as they face a severe supply network crunch. Toy makers are feverishly trying to find containers to ship their goods while searching for new alternative routes and ports. (AP Photo/Richard Drew)