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Supply chain crisis: Beanie Babies airlifted from Chinese factories to Chicago amid holiday crunch

Supply chain constraints won't keep Beanie Babies from reaching American homes this holiday season.

Chicago billionaire Ty Warner, who manufactures Beanie Babies in China, said he has booked more than 150 cargo flights in Shenzhen, Guangzhou, Shanghai, and Hong Kong since October to airlift the toys more than 6,000 miles to Chicago, according to a press release, circumventing backlogged ports and other supply chain issues.

"Christmas is not cancelled," Warner, who launched the private company Ty Inc. out of his home in 1986, said in the press release.

After the Beanie Babies land at Chicago O'Hare Airport, the stuffed animals will be sent to Ty Inc.'s warehouse in suburban Chicago to be distributed to retailers across America.

Each cargo flight can cost up to $1.5 to $2 million, according to the company. Despite the additional cost, Ty hasn't raised prices on its products.

Photo by Tim Leedy 9/1/04 Melissa L. Katchur of Leesport sells Beanie Babies at her stand at the Leesport Farmers Market. (Photo By Tim Leedy/MediaNews Group/Reading Eagle via Getty Images)
Melissa L. Katchur of Leesport sells Beanie Babies at her stand at the Leesport Farmers Market on September 1, 2004. (Photo By Tim Leedy/MediaNews Group/Reading Eagle via Getty Images)

'An unusual year for holiday shopping'

According to a Nov. 3 note by Oxford Economics' Mahir Rasheed, supply side headwinds "will undoubtably make it an unusual year for holiday shopping."

And though American consumers across the country may be frustrated with out-of-stock items and higher prices on goods from grocery stores to diapers, inflation and shortages haven't dampened the overall desire to spend this holiday season.

"Favorable spending fundamentals among U.S. consumers and a desire to make up for last year’s socially distanced holidays should add up to the strongest holiday spending season since 1999," Oxford Economics stated.

The note added that container shortages and backlogs have caused shipping rates from China to the West Coast to surge by 339% year-over-year, to more than $17,000 per container.

(Source: Oxford Economics)
(Source: Oxford Economics)

Many firms — such as mattress maker Tempur Sealy — are backlogged in terms of orders amid the supply chain disruptions and have had to turn away orders and raise prices to keep up.

Swedish furniture chain IKEA also signaled that it would be raising prices, after a drop in full-year profits due to the backlogs.

Businesses expect the delays to persist for a while: An Oxford Economics survey of 148 businesses recently found that only one in five businesses affected by the supply chain disruptions believe that the worst of the crisis is over. Sixty-four percent said they expected the crisis to end in mid-2022.

Warner's efforts highlight how the holiday season has triggered a race among retailers to fulfill consumer demand during this holiday season.

"The widely-reported problems with global supply chains have cast a pall over the coming Christmas," Warner stated. "There's too much doom and gloom out there."

Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

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