Supply chain disruptions will make decking the halls more expensive than ever for consumers looking for artificial trees this Christmas.<\/p>\n\n\n\n
Some U.S. retailers are raising prices by 20% to 25% to keep up with soaring shipping costs and warn that certain trees could sell out early because deliveries from foreign producers have been affected by the congestion that has paralyzed distribution networks, from ports in China to cargo rail yards in Chicago.<\/p>\n\n\n\n
Balsam Hill, a Redwood City, California company that sells mid-range to high-end trees online and in stores, is raising prices by 20% on average, with list prices for some of its trees approaching and exceeding the $1,000 mark it charges for its premium trees. “We have never raised prices anywhere near this much in our history and we will make far less money,” said Mac Harman, the company’s chief executive.<\/p>\n\n\n\n
The company’s 7\u00bd-foot-tall Brewer Spruce with clear LED lights is listed at $999 this year, up from $899 last Christmas. Its 4\u00bd-foot-tall Grand Canyon Cedar tree with clear multicolored lights will be priced at $499, up from $300 last season, as soon as it becomes available.<\/p>\n\n\n\n
Harman said he expects the company’s inbound U.S. shipping costs to quadruple this year compared with 2020, reaching between $45 million and $50 million on projected sales of $200 million to $250 million.<\/p>\n\n\n\n
Harman expects to run out of many holiday items, such as ornaments, trimmings and lights, due to shipping delays. His firm is currently struggling with fall items, such as autumn wreaths and Halloween decorations. At this time last year, the company had around 40,000 fall items in stock. As of the first week of September, it had fewer than 1,500 items, Harman said.<\/p>\n\n\n\n
Retailers that import holiday items, such as trees, are highly exposed to supply chain disruptions, not least because the products have a limited selling window that closes with the holidays. A tree that arrives too late must be heavily discounted or stored for a year. Rising container shipping rates hit artificial Christmas trees hard because only a limited number fit in a container, so the cost per tree rises quickly when ocean prices go up.<\/p>\n\n\n\n
The average worldwide price to ship a 40-foot container has more than quadrupled from a year ago, to just over $10,000, according to a global price index from London-based Drewry Shipping Consultants Ltd. Artificial tree importers said they are paying $20,000 per container or more on the shipping spot market and are still struggling to find enough boxes to fill inventories in time for the holiday season.<\/p>\n\n\n\n
“It has become almost a full-time job trying to find the best possible price and secure the space,” said Nathan Gordon, president of Christmas Central, a primarily online seller of holiday items based in Buffalo, New York. These days he pays $22,000 per container, up from $3,500 last year.<\/p>\n\n\n\n
The artificial Christmas tree market is a $1 billion to $2 billion industry, according to the American Christmas Tree Association. The group, which represents artificial tree sellers, estimates that 85% of U.S. households had a fake tree last Christmas, up from 46% in 1992.<\/p>\n\n\n\n
Artificial trees became popular in Germany 150 years ago, where they were made of dyed goose feathers. Today, they are mostly made of plastic, can cost anywhere from under $100 each to more than $1,000, and can come pre-fitted with lights and decorations. “They can be reused year after year and are sustainable, safe, convenient and cost-effective,” said Jami Warner, executive director of the American Christmas Tree Association.<\/p>\n\n\n\n
Tree sellers reported shortages of live tree stock last year, partly as a result of light plantings of young trees since the 2008 financial crisis; trees can take up to a decade to grow to market size. But the National Christmas Tree Association, which represents tree growers, says live trees should be available this year. “We have never run out of Christmas trees,” said Tim O’Connor, the association’s executive director.<\/p>\n\n\n\n
The window for importing seasonal products is short for many retailers. Big-box retailers typically start shipping trees from Asia in June or July so they are in stores by October 1, said Dean Tracy, a former head of international logistics at Lowe’s Cos. who runs a North Carolina-based logistics and sustainability consulting firm, Global Integrated Services.<\/p>\n\n\n\n
“If it’s on the West Coast on an anchored ship, or still in the Far East, chances are Christmas is going to be late,” Tracy said.<\/p><\/blockquote>\n\n\n\n
Bottlenecks at seaports, along with congestion at rail terminals, warehouses and distribution networks, have extended the time it takes to move goods from China and other Asian export hubs to U.S. markets. There were 56 container ships anchored off the ports of Los Angeles and Long Beach, the main U.S. import gateways, waiting for berth space on Tuesday morning, and waiting times for some vessels had stretched beyond two weeks, according to the Marine Exchange of Southern California.<\/p>\n\n\n\n
Executives at Lowe’s and Big Lots Inc. have said in recent weeks that they moved up holiday imports to mitigate the impact of supply chain delays. “I think we feel really well positioned,” Lowe’s chief financial officer David Denton said at a Goldman Sachs global retail conference on September 9.<\/p>\n\n\n\n
U.S. imports of artificial trees rose 45% in July compared with the same month last year, when the flow of goods was heavily disrupted by the Covid-19 pandemic, according to trade analysts Panjiva, while overall Christmas-related imports fell nearly 25%.<\/p>\n\n\n\n
The National Tree Company, which sells mainly online through retailers such as Amazon.com Inc. and Wayfair Inc., imported nearly half of its artificial trees before the end of June, chief executive Chris Butler said.<\/p>\n\n\n\n
Butler said that despite the company’s efforts and its willingness to pay higher shipping rates, he expects to import 10% fewer trees than planned this year. “Every day we fight to get containers,” he said.<\/p>\n\n\n\n
The privately held company, based in Cranford, New Jersey, is raising prices on trees, wreaths and other holiday items by 25% to offset its higher costs. It is also selling to other U.S. retailers that realized they could not get enough trees in time for the holidays.<\/p>\n\n\n\n
“The message to customers is buy now and get what you need for Christmas,” Butler said. “There is definitely going to be a shortage and prices are going to be higher.”<\/p><\/blockquote>\n\n\n\n