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Denver toy manufacturer dealing with supply chain crisis firsthand

Port operation expansion announcement creates hope, but experts say it's a 'Band-Aid fix'
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Posted at 8:26 PM, Oct 15, 2021
and last updated 2021-10-15 22:38:46-04

DENVER— The holidays mean big business for the toy industry, but this year there is uncertainty despite President Joe Biden's announcement of 24-hour operations at the Port of Los Angeles in an effort to help unclog the supply chain blockage.

In the last six to seven months, Ed O’Brien, the founder of B4Adventure estimates he lost about $1 million in profits due to the supply chain chokehold. The loss in revenue was a combination of a spike in container prices, delayed product and lost sales, which led to layoffs.

“The containers before were costing us $6,500 to get a container from China to Denver. Now, it’s costing us $30,000,” O’Brien said. “It used to take 30 days to ship a product from China to Denver. Now, it takes three to five months.”

B4Adventure developers create toys and order their products from China. The company sells to major businesses like Target, Costco and Dicks Sporting Goods, which means orders and prices are set months in advance.

“Some retailers are understanding of the delay, and they still need the inventory. Some of them were seasonal, so you can’t actually fit that window, so we lost orders,” O’Brien said.

Several shelves were empty in one of three warehouses located in Denver. O’Brien said this time of the year every shelf is stocked in preparation for the holidays. The company has a shortage of select products and an overstock of other toys.

On Wednesday, Biden announced around-the-clock operations at the Port of L.A., one of the country's busiest ports. The move aims to alleviate the supply chain issues. Target, Walmart and other major retailers will expand their overnight operations to help meet delivery needs.

While the effort is creating hope for some business owners, Jack Buffington, a University of Denver assistant professor in the supply chain management department, called the move a “Band-Aid fix.”

“Any sort of short-term remedy is just incremental,” Buffington said. “It’s going to solve some problems at the port of origin, but you still have the same problem in the United States port being gridlocked, and you still need truck drivers to drive to the store.”

He said port officials are doing the best they can and must continue to abide by labor contracts.

O’Brien said he wishes the president would have acted on the problem earlier but says he's grateful something is being done.

“Hopefully, it will speed up the inventory that maybe we anticipated was supposed to be here”

The toy company plans to hold a warehouse sale on Oct. 22 and 23 to help make up losses in profits.