Supply Chain Issues Could Hamper Christmas Tree Sellers

Some U.S. Christmas tree sellers plan to raise their prices by 20-25% this holiday season to offset the higher shipping costs they’re being charged this year, according to a report in The Wall Street Journal.

Sellers are also adding warnings that some trees could sell out earlier than normal because overseas deliveries are being scaled back or delayed by distribution delays on both ends of the supply chain, the report says.

Trees and other holiday-themed items are subject to an extremely tight supply chain window — if they arrive too early, they might not last until the holiday, but if they arrive too late, shoppers may have found alternatives elsewhere, meaning the price must be discounted to sell it at all.

Shipping containers can only fit a certain number of artificial trees in each compartment, which means the per-tree cost goes up exponentially when other supply chain-related costs escalate. The average price to ship a 40-foot container around the world has more than quadrupled from last year to just over $10,000, according to a global pricing index by London-based Drewry Shipping Consultants Ltd, WSJ reports.

Artificial tree importers are paying $20,000 per container or more to meet anticipated inventory needs, the report says.

Artificial Christmas trees generate $1 billion to $2 billion, according to the American Christmas Tree Association, which says the portion of American homes with fake trees went up from 46% in 1992 to 85% in 2020.

Related news: Security, Supply Chain Issues Overshadow Apple’s Annual Product Debuts

Supply chain issues are impacting nearly every part of the economy and every retail segment. On a conference call with investors and analysts in July, CEO Tim Cook said Apple is “paying more for freight than I would like to pay,” and noted that it’s unclear how long the supply constraints will last. “We’ll do everything we can to mitigate whatever set of circumstances we’re dealt,” he said.

TSMC, Apple’s leading chip supplier, plans to raise costs by as much as 20% starting in January, according to several recent reports.