Looking back on 2010, we see  a difficult year. Most of our problems were caused by shipping. Not only our import shipping by steel container but also our truck shipping to our customers.

Import shipping became increasingly expensive as shipping companies claimed shortages of steel containers and not enough ships. It’s funny how these became available if we agreed to pay much higher prices. Add to this the very high cost for random government inspections and we were hit with a 40% increase in these costs.

The cost of LTL truck shipping to our customers increased dramatically in 2010. We lost our favorable treatment for residential delivery and the use of a the lift gate and the trucking companies arbitrarily added costs over and above their “usual” 5.9% annual price increase. Of course the “temporary fuel surcharge” continues to climb. I’ll bet that even if diesel fuel fell to $1 per gallon, this would still not disappear.

Many importers of Chinese made Christmas goods reported late and incomplete deliveries. Fortunately, we have most of our figures made in the Philippines, so we had few problems other than shipping delays.

It was the kind of year you would expect as the world economy slowly exits the “Great Recession”, but the tactics used by the shippers and suppliers makes one cynical and I don’t want to become that way when we design and sell such beautiful and inspirational figures.

Now that the rush is over and we are (mostly) out of stock, it’s time to consider some developments that will likely impact our business in 2011.

The first is the economics of ocean shipping. As you may know, we import most of our manufactured statues from the Philippines and China by shipping container. After a disastrous 2009 where the ocean shipping industry claimed losses of US$ 15 Billion, they started their recovery by raising rates by more than 25% in 2010. With tight capacity, these rates held in 2010. They are now proposing increases for 2011 of as much as 18% for high season (June15 to Nov30) container shipping.

There are two factors impacting this proposal. The first is reported by The Economist magazine on Jan 1, 2011, regarding growth in the world’s fleet of cargo ships. Growth in capacity for all forms of cargo shipping has stayed high despite the word wide recession. Even though world seaborne trade declined by 4.5% in 2009, the world’s merchant fleet grew by 7%. For 2011, container ship capacity is forecast to grow by 50 million tonnes. Offsetting this increase in ship capacity is the continued shortage of new steel shipping containers.

More on this as the season proceeds. In the meantime we have to err on the side of caution in our cost forecasts

So far, this has been an unusual and frustrating year for Christmas Night Inc. Normally we expect to start receiving our Christmas Nativity sets and other large Christmas decorating figures in May and to have completed most of these incoming shipments by the end of August. This year, the Chinese labor shortages and labor strife, shortages of shipping containers, missing ships and poor weather have delayed much of our incoming product by several months.

The exciting thing is that we have now taken delivery of a large number of containers, most of which arrived last week and are arriving this week. While this puts quite a strain on our receiving and warehouse staff, we can now start to fill pending orders, follow up the many inquiries and contact loyal customers who want to complete sets or add new pieces to their collections. It also means that we can start to advertise online and with newsletters to our loyal customer base as well as pump up our SEO efforts.

We have also created a Christmas Night page on FaceBook and added a FaceBook Share icon on the website pages and this blog. We hope that customers will use these tools to show their friends sets and items that they liked and perhaps purchased,as well as sharing their Christmas stories and pictures. Please contact us and let us know what else we can do to make the website and blog as user friendly as possible.

I have written recently about the problems of having product made and shipped from factories in China, The Philippines and India. These problems include labor strife and labor shortages, lack of shipping containers and slow and increasingly costly ocean shipping. We can now add to this list, severe weather and disasters caused by inadequate facilities and developing country infrastructure.

What do I mean by these terms? Well we have recently had several shipments delayed by typhoons, which is what they call hurricanes in the Pacific Ocean. It appears that their typhoon season is earlier than our hurricane season in the Atlantic and Gulf of Mexico. Thus our factories in the Philippines have recently shut down to ride out the storms and clean up after. Fortunately, they seem to handle this well.

Another of our factories, in the middle of a major city, has just burned to the ground. We surmise that a combination of old, unsprinklered buildings which resembled a rabbit warren, working with combustible materials and indifferent municipal fire fighting services, usually reserved for those who pay, resulted in the complete loss of the production facility.

Fortunately, the factory owners are an organized and resilient group and have promised to rebuild for next season. The good thing for us is that our shipment from them is on the water and will be delivered to our warehouse next week. International supply chains may be less expensive than producing in the US (although that may change for some products), but they introduce many other costs and risks