Toymaker Ty air ships products for the holidays to avoid port congestion - The Entrepreneurial Way with A.I.


Friday, December 3, 2021

Toymaker Ty air ships products for the holidays to avoid port congestion


Dive Brief:

  • Ty Inc. is air shipping its products for the holidays to avoid port congestion, and the toy manufacturer has already financed 283 cargo flights into the U.S. since October, according to a news release on Monday.
  • Ty's Beanie Babies and Beanie Boos products are shipped via flights from China, where they are made, to Chicago. The toys are then carted to Ty's suburban Chicago headquarters for further shipping to small retailers along with specialty, convenience, grocery and drug stores.
  • The typical cargo flight costs between $1.5 million and $2 million, Ty said. But the company said it hasn't raised prices on its products, and its Chairman, CEO and founder Ty Warner said the flights will continue.

Dive Insight:

More companies are taking their freight to the skies as the holidays begin, sacrificing the cost-effectiveness of ocean shipping to ensure products arrive in time.

"I'm determined not to let the global supply chain issues interfere with the holidays, and I'm committed to supporting independent retailers," Warner said in a statement.

Supply chain bottlenecks, including a backlog of container ships outside the ports of Los Angeles and Long Beach, have locked some shippers' inventories in transit. According to Salesforce, product catalogs over Cyber Week dropped 6% year over year in the U.S. as retailers grappled with logistical hurdles.

Some companies shipped their goods well in advance of peak season or are spending more to work their way around the issues. Ty is among those opting to lean more on the speed of air cargo to keep their goods moving.

Healthcare apparel company FIGS expects to spend about $8 million to $10 million in air shipping in its fourth quarter to ensure limited-edition styles and colors arrive on time to meet demand, CFO Jeff Lawrence said on an earnings call. The company spent about $1 million in airfreight in the previous quarter.

"So, we don't think it's going to be airfreight business ongoing," Lawrence said. "That was really just a reaction to the in-transit issues that everyone is having."

But relying more on airfreight brings its own hurdles. Capacity constraints and elevated shipping rates have been a constant in 2021, and airports in both China and the U.S. have had challenges efficiently handling cargo.

Some carriers have announced flight cancellations out of Hong Kong and Guangzhou — two locations Ty flies out of — and airlines departing Guangzhou "continue to reject large shipments or provide longer transit times of up to 3 weeks," Flexport said in a market update. In the U.S., terminal operations at airports "remain a challenge" and some are understaffed, according to C.H. Robinson.


Max Garland, Khareem Sudlow