December 16, 2020


Dear Customer,

As you know, our industry has faced many highs and lows. Today, I would like to inform you of where we are in terms of shipping, costs, and production.

First, an update on the shipping accident that took place on November 30th. Winco had 11 containers out of the approximately 64 firework containers that were aboard the ship that suffered major damage due to severe weather. Most of these containers were customer direct containers. We do not know if all 11 containers will be marked as a loss, however Brothers has committed to re-making the product in time for the 4th of July Season.

Next, the Beihai port is scheduled to close on December 31. All shipments must be loaded by that date with the last scheduled shipment to be in early January. Shipping costs also increased by $5,800 in November and December.

We were excited to hear that Shanghai reopened a couple weeks ago. Unfortunately, we were hit again with a freight increase of $5,800 and in some cases base freight went up as well.

Another issue we are seeing is limited capacity for fireworks on vessels. Due to COVID-19, China is exporting a lot of merchandise to the U.S. and not much is returning, causing extreme congestion at California ports. Containers are taking longer to unload and with the trucking shortage, many vendors are cancelling their voyage to the U.S. or delaying them.

As for production, it was at an all-time high, however, with the shipping issues many of the factories and warehouses are full, so production is slowing down. We hope shipping will return to normal and manufacturing will increase once again.

Another important factor we monitor is exchange rate. The exchange rate between US dollar and China RMB is increasingly favoring China. Last May, if you exchanged $1,000 US dollars you would get $ 7,100 + back. Today, if you gave China that same $1,000 US dollars, you get $6,530.00 back. Take that multiplied by millions of dollars and you can see how drastically this affects our business. Effective immediately, we will be charging an additional amount on container shipments based on the exchange rate at time of shipment.

Prices out of our warehouse will go up substantially. Our Grandview location is not accepting new orders until we have a chance to update our pricelist. Our southern satellite warehouses will continue to fulfill early orders in-house but will implement a price increase on all new orders.

After a banner year for the consumer fireworks industry, things will be substantially different for 2021. I believe we will be faced with a significant product shortage in the U.S. since inventories are at an ALL TIME low and shipments are trickling in. I promise we are on top of this and will continue to push China.

Thank you for your understanding.


Mike Collar