In August of this year, Hanjin Shipping filed for bankruptcy protection in South Korea after they were unable to cover fuel costs and worker pay. Now you wonder what a shipping company in Korea has to do with the biggest shopping holiday of the year? It is common knowledge that most American companies outsource production of the majority of their goods to foreign soil where labor and material costs are cheaper. The problem lies in how those American companies then bring their finished products to the U.S.
Hanjin Shipping currently has millions of dollars in merchandise stranded at sea or seized by creditors from companies, such as Samsung and Nike, that could be delayed up to 3 months, well after the holiday season, cutting out the sales peak of the year.
The holiday season is not just important to retailers, but is crucial to the publishing business which relies on seasonal sales to provide cash flow for the upcoming year. Publishing production schedules are tight to the day with any delay causing enormous, potentially catastrophic, costs.
Luckily for the affected publishers, such as Bloomsbury and Viz Media, Hanjin Shipping is sporadically landing on American soil causing only minor delays. This is a risk when businesses choose to outsource production instead of using local resources. Shipping is the start of a long supply chain, and though a judge has allowed for ships to port and Hanjin Shipping has sent out an additional fleet of 20 to help those stranded, the product still remains unavailable despite the planning of hard-working Editors and Publicists.
The delays are projected to end soon and may affect Black Friday, but as of now, are not likely to alter the greater holiday season.
Happy Holidays Everyone!