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Pallet Shortages & China Factory Closures Set To Hit Holiday Supply

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CE and appliance retailers are facing new concerns with several consumer electronics factories in China closed down. Compounding this a massive shortage of pallets which is delaying the shipping of goods to retailers in Australia.

Last night several CE and appliance Company stocks fell with analysts concerned that stock bound for stores over the holiday period won’t arrive in time.

Black Friday has been a spectacular success for CE and appliance retailers with organisations such as Laser Corporation, Tempo, Blueant reporting record sales.

“We are already getting calls for fresh stock for the holiday period” said one distributor.

The real concerns are COVID factory lockdowns, pallet shortages and demonstrations that broke out in mainland China over the weekend as people vented their frustrations with Beijing’s zero-Covid policy.

Shares of companies with big production facilities in China were under pressure. Apple dropped 2.6% after Bloomberg reported that unrest at a factory in China could mean 6 million fewer iPhone Pro units for the year.

“When you look at Apple not being able to fulfill the orders for their iPhone because the factories in China are shut down, I think that’s a perfect example of how something in one country can affect somewhere else,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments. “It just has a ripple effect through the global economy when you have something as large as the Chinese economy shutting down.”

In Australia Apple will not have stock of their new iPhone 14 until January at the earliest according to retailers.

Then there is the issue of pallets with several local distributors telling ChannelNews that shipments have already been delayed due to a global shortage of pallets.

Pallets are instrumental in transporting bulk goods and utilised by businesses globally. However, a number of factors have led to a shortage of pallets available within Australia, and this is consequently placing pressure on supply chains claim shipping Companies.

The three core reasons for pallet shortages are timber shortages due to high demand due to an increased number of home renovations during COVID.

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