January 2021 Newsletter
Dear Valued Customer,
We hope everyone had a safe and happy New Years! At Garrett’s Fireworks, we have been busy preparing for our upcoming season by renovating and expanding our office space and adding more racks in our warehouse to hold more inventory.
We have some exciting new products coming and will send out our new product catalog and price list sometime in March. Currently, we have a re-designed website and are making improvements to it weekly. Soon, customers will be able to create an account and place orders online. Currently, our price list will be unavailable as we are working on spring pricing.
As many of you can relate, we had a big season this past summer and moved a lot of inventory. We received a fair amount of replenishment stock in this fall but moved most of it in our fall 2020 wholesale season. We are currently at low stock levels and are working hard to replenish. Containers are trickling in slowly from China and there are a lot of world events that are affecting our abilities to get product here more quickly.
During last year’s shutdown in March, the shipping lines mothballed many of the container ships due to a lack of demand for consumer products. As a result of the holidays, coupled with increased consumer spending around the world, the container vessels cannot keep up with the demand. For unknown reasons, the shipping lines have not yet reactivated the vessels and may never do so. Instead, they have dealt with the increase in demand by raising the shipping costs on each container. Despite this action, companies around the world are paying the increased costs because inventory levels are very low. There is also a dearth of empty containers available which is exacerbating the problems.
Unfortunately, for the fireworks industry, the freight increase is between $5,000 and 6,000 per container! That makes shipping a container from the Hunan province of China to Kansas City cost more than $15,000. This is the most significant increase in costs we have ever seen. It is possible that later in the year, this could come down, but we need the inventory urgently enough that we have no choice but to pay it and pass on the increase. It is my understanding, that every large fireworks distributor in the United States is in the exact same situation so this should result in an industry-wide increase in price.
The next challenge we have is that fireworks can only utilize a small percentage of the shipping vessel and with a decrease in the total number of shipping vessels, fewer containers of fireworks can ship to the US. Production has been going well in China and we have more than 30 containers of inventory that can ship now but can only get space for a few containers at a time. The containers that do sail, are taking almost two months to reach us due to backlogs at US ports.
The above problems are also creating a backlog of product at the factories. It seems like every year we have challenges in the fireworks business and somehow, by some miracle, things change, and it all works out. Hopefully, this will happen again but right now it is looking like there will be nation-wide shortages of fireworks. Currently, there are almost no roman candles, assortments and Saturn missiles to be found anywhere. These items are likely to continue to be short this summer because of the labor needed to make them. The orders with the factories in China are very large this year so the factories are going to prioritize what is quick and easy to make.
Because our brand is becoming nationally recognized and our service and products are top-notch, we have taken on a lot of new clients over the past two years. In the up-coming season, we will consider new customers but will prioritize current customers first and foremost. This includes new customers brought on this past fall.
As many of you may recall, last year the Chinese government created a new rule regarding any products with a 1.2” tube or greater. This new regulation is in place and has affected some of our product line. For some products, we were able to modify the tube diameter without affect the performance. However, for items like 3” 9 shot devices, the cost increase to put a wire cage on the outer box, plus shipping increases unfortunately raises the price so dramatically, that we are now cancelling production of all such items.
As many of you already know, there was a major incident last month on the high seas that is also going to affect the American fireworks market. A container vessel was caught in a storm and lost over 1800 containers which sank to the bottom of the ocean. Aside from the tragic environmental impact this caused, it also included at least 40 containers of consumer fireworks which may not get remade until after July. This means there are approximately 40,000 fewer cases of fireworks in the American market when we are already facing shortages. Luckily, Garrett’s Fireworks did not have a single container on that vessel.
As always, we are doing all that we can to continue to serve you. We are communicating with our manufacturers every night and are doing all we can to keep product flowing. Our relations with the shipping companies are very good and is helping to get space for our products and our customers.
I will send another update soon and I hope to share with you better news. Right now, we are preparing for our demo and have not yet decided if it will be in person or virtual. We will let you know the decision on our next update. We are predicting that this summer’s fireworks sales will be as good or nearly as good as they were last summer. It is our mission to get you the product you need to capitalize on it.
In the meanwhile, please stay safe and we encourage everyone to get the vaccine as soon as it is available to you so life can start getting back to normal.
Eric J. Garrett