By Parija Kavilanz, CNN Business
The Elf on the Shelf — a popular elf doll that parents place around their home in the runup to Christmas to “monitor” if the kids are being naughty or nice — has been showing up in many American households in the days after Thanksgiving for more than 15 years now. But this year the elves’ journeys to stores and homes has been more complicated.
All kinds of businesses across the globe have been scrambling to try to manage a stalled supply chain that’s created a serious backlog of inventory at major ports and a shortage of workers to deliver it. But the problem feels particularly harrowing for companies that make a highly seasonal product with a tight sales window, like The Elf on the Shelf.
The Lumistella Company, the business behind the The Elf on the Shelf storybook and doll brand, makes the elves in China, then -— ideally, at least — gets them to the warehouses for retailers like Walmart, Target and Amazon weeks in advance of Thanksgiving. Since the product loses its relevancy after Christmas, there’s always a ticking clock. Logistics like these are never easy, but this year has brought with it a number of new challenges for the company to work out.
Christa Pitts, co-CEO of The Lumistella Company, told CNN Business recently that she saw the writing on the wall as early as January and didn’t want to risk waiting to see if the supply chain issues would ease up — or maybe become worse.
The company typically places production orders with its manufacturer in April. She decided to move orders up by two months into February. As she did that, she was confronted by a host of challenges — not only were manufacturers in Asia facing labor and raw materials shortages that made production for many companies more difficult, but prices for shipping containers were rapidly climbing and fully-loaded ships were getting delayed.
And once products finally made it onto ships, she said, the typical time at sea had gone up.
Meanwhile, the domestic ground transportation that’s vital to moving imported goods across the United States was struggling too, hit by problems including shortages of the trailers used to transport shipping containers and of truck drivers.
“All kinds of supply chain hurdles were coming together in a way that no one could have predicted,” said Pitts.
Realizing that would create new problems once she actually got her products to the US, Pitt did something she’d never done before — transporting some of the elves and other holiday inventory from China by air.
For the first time, the company put some shipments on planes in June, using five cargo planes for about 100,000 units in total.
Overall, Pitts estimated, 10% to 15% of her company’s holiday inventory this year will have arrived via plane and the remainder by ship.
“It was extraordinarily expensive,” she said. “But backordering and missing Christmas were not options for us. The Lumistella Company is Christmas, so we had to deliver.”
Struggling to make it into stores
Getting the elves that had arrived via ships onto land was another problem.
Pitts knew that West Coast ports in the United States were clogged with thousands of containers waiting to be unloaded. So the company decided to bypass those ports, which it was lucky enough to only use for some of its shipping in the first place, and have its products arrive at the less congested East Coast ports at Savannah, Georgia and Charleston, South Carolina.
Both of these ports were also closer to Lumistella’s headquarters in Atlanta.
Luckily for Pitts, the early mitigation strategies enabled the company to get all of its holiday inventory into the US by the end of September, with none of it still stuck on ships.
The elves have all made it to warehouses, where many are awaiting transport to distribution centers operated by retailers.
But the elves’ complicated journey is still not over.
Now, Pitts has been faced with figuring out how to get the pallets of products out of the warehouses, on the road and to retailers. Those warehouses, which are run by third-party providers, are getting overloaded and there’s been no way to quickly clear them because of the ongoing trucker shortage, she said.
“I had one partner who is 141% above capacity at one warehouse,” said Pitts. Trucks are needed every step of the way on the land transportation of the products.
For instance, if the goods do make it out, they are first sent to retailers’ large distribution centers on long-distance freight trucks. From there, products are typically earmarked for delivery to individual stores, again on trucks. “It’s enormously frustrating,” said Pitts.
She’s thought about using planes again to transport products from the warehouses to retailers’ distribution centers. But that won’t work, she noted, because it’s not as if the planes can be flown right up to a distribution center — a truck is still necessary at some point.
About 70% of the the inventory has made it to retailers so far, said Pitts. That number is typically closer to 100% by now. She anticipates the remaining 30% will get to retailers in time for the holidays, although exactly when is unclear.
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