Gamers: Big Shipping Delays Coming

shipping-boat

Get ready for a rocky holiday season. One of the worlds major shipping companies just went belly up.

In a story covered by the Associated Press South Korea’s Hanjin Shipping Co. has gone bankrupt. “Okay, so why is this being covered on BoLS?” Great question! The reason is because Hanjin is listed as the world’s seventh-largest container shipper and that translates to roughly “8 percent of the trans-Pacific trade volume for the US market.”

“Oh, well that still leaves 92 percent,” you say. Well, it’s not that simple. As with economics on the MACRO level, this type of thing has a lot of factors at play. To put it frankly there are millions of dollars of retail goods and merchandise stuck in ports in China, at sea, or in the LA ports. Yeah – those same ports. And you do remember the last time the ports were hit with delays, right?

shipping container

“But this is just one shipping company, surely they will just move their product from those ships to another company.” That’s entirely true! Manufacturers will have to find alternate shipping methods. Except it’s not going to be at the same price they had just negotiated.

“Other shipping lines may take on some of Hanjin’s traffic but at a price. Since vessels already are operating at high capacity, shippers may wind up paying a premium to squeeze their cargo containers on board, said Jock O’Connell, international trade adviser to Los Angeles-based Beacon Economics.

The price of shipping a 40-foot container from China to the U.S. jumped up to 50 percent in a single day, said Nerijus Poskus, director of pricing and procurement for Flexport, a licensed freight forwarder and customs broker based in San Francisco.”(AP)

Yeah, that’s not good. There are lots of other factors aside from the millions of dollars in retail goods stuck in transit at sea. The ripple effect is already impacting the entire global supply chain from the manufacturers, to the docks & ports, to the truckers & shipping companies, all the way down to your local retailer.

boxes

And don’t think this is just a US shipping problem. “Around $14 billion of cargo has been tied up globally,” according to Reuters. That’s a lot of goods and a really big mess to sort out.

If you were expecting to receive goods manufactured in China, considering they are the United States’ 2nd largest trading partner, you might want to prepare yourself for delays.

WizKids_HeroClix_Logo_SmallA bunch of Kickstarter campaigns for board & tabletop games sent out delay notices. This is expected because many of those Kickstarters had their goods produced in China due to limitations on in-house manufacturing. But don’t think this is just impacting all those smaller companies; The big guys are starting to feel the heat, too. ICv2 is already reporting that WizKids has announced a delay of their new “Teenage Mutant Ninja Turtles HeroClix: Heroes in a Half Shell Gravity Feed.”

Now, before everyone panics, authorities are working on solutions to this shipping crisis:

“The National Retail Federation, the world’s largest retail trade association, wrote to U.S. Secretary of Commerce Penny Pritzker and Federal Maritime Commission Chairman Mario Cordero on Thursday, urging them to work with the South Korean government, ports and others to prevent disruptions.”(AP)

And, according to Reuters, millions of dollars have already been raised to get the shipping containers unloaded, but Hanjin still has a long way to go. I’m just hoping they get all this sorted out soon. Q4 is the biggest season for retail stores in the US – these type of delays could cause billions of dollars worth of economic damage globally. So here’s hoping that Hanjin, the South Korean government, and all the countries involved can sort this mess out before more damage is done.

 

It can take companies in the US up to 6 weeks to get their goods from Chinese Manufacturers if you count prep & transit time plus customs & transportation from the dock.

  • georgelabour

    Now the interesting thought is, will this affect GW since most of their non terrain kits are supposedly done ‘locally’ with just a few things made in China?

    • wibbling

      To the UK no. The books are printed here and the models are produced here. It is one reason why they’re a great company. Everything is British.

      Getting stock overseas, and other companies getting to the UK is going to be harder but mostly for transatlantic shipping. Getting kit from the US, say from Wyrd or Privateer (to name two easy examples) is going to be interesting.

      Prices will stabilise – that’s inevitable. What’s more concerning is having one fewer competitor in this field. That’s bad for everyone.

      • Jon Ow

        Product may be manufactured in UK but isn’t the raw goods like metal from China?

      • Shawn

        I’d contend that info. I seem to recall that the codices are in fact printed in China.

    • Loki Nahat

      absolutely not, almost everything GW is made on site in Nottingham

      • georgelabour

        But they don’t own their own shipping company, and some of those terrain kits are in fact made in China.

        Or they were anyways. As is the new basing kit.

        And then there’s books. I’m not entirely sure where those get printed.

  • Richard Mitchell

    Globalization and miniature wargaming, quick someone right a research paper and post it!

  • nurglitch

    Should be interesting to see how this affects Pacific trade.

  • euansmith

    All the best to the Hanjin employees who are going to be out of a job.

    • wibbling

      There’s a great article about the crew of a stranded vessel literally hostage to their company. They just want to go home but can’t and their vessel can’t leave because it is being held by creditors: http://www.bbc.co.uk/news/business-37335614

    • Shawn

      Hear hear. It’s a shame that anyone has to lose their job because of a company’s mismanagement or bad luck in trade.

  • Commissar Molotov

    Poor Aussies. Only way they’ll be getting the new releases is if they’re willing to swim.

    • Red_Five_Standing_By

      You’re closer to China than the US 🙂

    • Jon Ow

      Well we got our Others: 7 Sins first ahead of Europe which now has their pledges stuck on the ships.

      • euansmith

        My Wave 3 pledge stuff from DUST: Operation Babylon, only a couple of years late, is now stuck on a ship. I blame the curse of DUST/Battlefront for the collapse of Hajin.

  • Enochi

    Wonder if Transportation costs keep rising we will see some of the manufacturing jobs return stateside.

    • Loki Nahat

      GW was never manufactured in the states

      Smaller companies, maybe, I don’t keep abreast of the new ones, but I’d wager they already were in the USA

    • Shawn

      That would be a real boon.

  • Shawn

    And this is what we get for producing our games, toys, etc in China. Sure it costs less, but we wouldn’t have these delays if everything was made in the U.S or UK.

  • SacTownBrian

    Something is missing in this story. If this single shipper is so big and critical that it can disrupt 13 billion in good how the heck did they go bankrupt in the first place? Secondly why doesn’t someone pick up their business and equipment at bankruptcy prices for huge profits?

    • JPMcMillen

      One, probably epic levels of financial mismanagement.

      Two, the bankruptcy takes time, and it doesn’t always mean that a companies assets will be liquidated.