Everglory

Fireworks, tariffs and a happy 4th of July!

2Jul, 2019



The fourth of July is the quintessential America holiday. It’s a lively celebration where families get together, swim, travel, barbecue, and either watch or take part in a fireworks extravaganza. Fireworks have been part of the celebration of Independence Day since the 1770’s and could be considered the first key part of the celebration. Now, it’s a billion dollar industry and still one of the few that is mostly local businesses and mom & pop shops that only operate around the fourth and New Year’s Eve.

In 2018 firework sales in the United States topped $880 million dollars, moved 270 million points of inventory, generated $1.3 billion in associated revenue with an average customer spend of $55 per person, according to the American Pyrotechnics Association. The industry is so large and so crucial to the summertime event season that when the FMC tried to restrict hours for drivers, the FMCSA gave drivers an exemption to the 14 hour service rule in part thanks to the safety record for drivers during the season.  

This season, 67 products, almost 40,000 fireworks across three states, were recalled by the Consumer Product Safety Commission (CPSC) for having too much explosive power. Retailers in Michigan, Indiana and Pennsylvania are scrambling to find out if they’re selling the products that should be removed from shelves. A recent federal sampling declared that almost 31% of firework imports (overwhelmingly from China) are faulty, according to the APA as reported by ABC DC affiliate, WJLA.

Ninety-nine percent of all backyard fireworks and 75% of professional grade fireworks come from China and current discussions about tariffs and safety have made sellers concerned. Most admit they could survive a hike of 5-6% but 25% will cripple their business. To understand what that means, we dug a little deeper in this article to see where those tariffs would impact the supply chain and found that it will land squarely on the backs of the small businesses.

Who are the people who operate those small businesses and count on them for seasonal work? They’re mostly employees who have schedules conducive to working summer hours and usually rely on the additional income – teachers and school employees, for example. It’s possible that US households will pay an extra $831 in 2019 due to increased tariffs on all Chinese imports.

Chinese economic reforms in the 1990’s paved the way for Chinese fireworks to become private labeled and competitive with each other leading to an explosion (pun intended) in options for both professional companies and the backyard enthusiast. However, the more the market grew, the more regulations have been placed on the shipping and carrying of these goods. In one of the most regulated categories of shipments, in one of the most heavily regulated industries, more barriers are hard to ignore and manage for family-owned businesses.

The regulations are for good reason in most cases, considering the number of injuries declined in recent years, mostly thanks to safety awareness campaigns, clearer warnings on packages and safer products. Today fireworks average 7 deaths per year and 12,900 injuries treated in ER facilities, with children under 5 being the second highest rate at 4.4 injuries per 100,000 people.

All of us at Everglory would like to take this time to wish you and all your families a happy and safe 4th of July holiday. Enjoy !!!




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