Some U.S. Christmas tree vendors plan to increase their prices by 20 to 25 percent this holiday season to offset the higher shipping charges they are charged this year, according to a Wall Street Journal report.
Sellers are also adding warnings that some trees could sell out earlier than normal, as overseas deliveries are reduced or delayed by distribution delays at both ends of the supply chain, according to the report.
Trees and other holiday-themed items are subject to an extremely tight supply chain – if they arrive too early they may not last until the holidays, but if they arrive too late buyers may have found alternatives elsewhere, which means the price must be reduced to sell it at all.
Shipping containers can only hold a certain number of artificial trees in each compartment, which means the cost per tree increases exponentially as other supply chain costs increase. The average price for shipping a 40ft container around the world has more than quadrupled from last year to just over $ 10,000, according to a global price index compiled by London-based Drewry Shipping Consultants Ltd , reports the WSJ.
Importers of artificial trees are paying $ 20,000 per container or more to meet anticipated inventory needs, according to the report.
Artificial Christmas trees generate between $ 1 billion and $ 2 billion, according to the American Christmas Tree Association, which says the share of American homes with fake trees has increased from 46% in 1992 to 85% in 2020.
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Supply chain issues affect almost every sector of the economy and every segment of retail. On a conference call with investors and analysts in July, CEO Tim Cook said Apple “pays more for freight than I would pay,” and noted that it’s not clear how many supply constraints will last. “We will do everything possible to alleviate the circumstances in which we will be faced,” he said.
TSMC, Apple’s main chip supplier, plans to increase costs by up to 20% starting in January, according to several recent reports.