Getting an artificial Christmas tree may be a headache this holiday season as supply chain disruptions interrupt shipping and cause prices to increase by 20 to 25 percent.
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According to a Wall Street Journal report, some retailers in the U.S. are raising their prices this much to keep up with shipping costs. For example, Balsam Hill of Redwood City, Calif., has raised prices by 20 percent on average.
“We’ve never raised prices anywhere close to that in our history and will make way less money,” said Mac Harman, the firm’s chief executive. He expects the company’s U.S. inbound shipping costs to quadruple this year compared with 2020, up to $45 million to $50 million on projected sales of $200 million to $250 million.
Overall, the average price world-wide to ship a 40-foot shipping container has also more than quadrupled since last year – to just over $10,000 – according to a global pricing index by London-based Drewry Shipping Consultants Ltd. Some artificial tree importers are paying $20,000 and up per container or having trouble finding boxes to fill inventories in time for the holiday season.
“It’s become almost a full-time job trying to find the best price you can get and getting the space,” said Nathan Gordon, president of Christmas Central, a mostly online seller of holiday goods based in Buffalo, N.Y. Gordon said he sometimes pays $22,000 per container, up from $3,500 last year.
U.S. imports of artificial trees were up 45 percent in July compared with the same month last year. At that time, the COVID-19 pandemic was still causing heavy disruptions in distribution.
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Retailers are expecting to run out of some Christmas trees early due congestion impacting distribution networks from ports in China to Chicago freight yards. According to the Wall Street Journal, retailers that import holiday items such as trees are vulnerable to supply chain disruptions due to the time sensitive nature of their goods.
“A tree that arrives too late must be heavily discounted or stored for a year,” the outlet explained. Typically, trees for big box retailers are shipped from Asia in June or July to be ready for stores by Oct. 1, said Dean Tracy, a former director of international logistics for Lowe’s Cos. who runs a North Carolina-based logistics and sustainability consulting firm, Global Integrated Services.
Some retailers, such as Lowe’s and Big Lots, said they planned ahead to get holiday imports in on time.
Artificial Christmas trees make up a $1 billion to $2 billion industry annually, according to the American Christmas Tree Association. Often made from plastic, the trees can be reused and are easier to maintain than real trees.
Last year, live tree vendors also reported tight supplies. Light plantings resulting from the 2008 financial crisis have impacted the supply, as saplings can take a decade to grow to market size, said the Wall Street Journal. However, Tim’ O’Connor of the National Christmas Tree Association, which represents tree growers, said there should be plenty available this year.
As artificial tree vendors await a difficult holiday season, there are already issues with other seasonal items. This time last year, Balsam Hill had about 40,000 fall items in stock, and of the first week of September it had fewer than 1,500 items, Harman said.
“The message to customers is buy now and get what you need for Christmas,” said Chris Butler of The National Tree Company, which mostly sells online via retailers such as Amazon.com Inc. “There are definitely going to be shortages and prices are going to be higher.”
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