Firms charter ships to overcome supply chain hurdles

Will Green is news editor of Supply Management
23 August 2021

Retailers including Walmart and Home Depot are chartering container ships to overcome supply chain challenges.

US ports and others across the world remain disrupted by the pandemic, with containers in the wrong place, a shortage of empty containers and ships queuing up to unload goods.

The world’s third biggest cargo port after Shanghai and Singapore, Ningbo-Zhoushan in China, remains partially closed since 11 August following a Covid outbreak.

In an earnings call Brett Biggs, CFO at Walmart, said: “We continue to monitor industry trends related to transit and port delays. Our merchants continue to take steps to mitigate challenges, including adding extra lead time to orders and chartering vessels specifically for Walmart goods.”

In another earnings call Ted Decker, president and COO at The Home Depot, said: “Raw material shortages, production constraints, and pressures across modes of transportation are creating a difficult supply chain environment.

“Our supply chain teams recently leveraged our scale and flexibility to arrange for several container vessels for our exclusive use; yet another way our teams found a creative solution to better serve our customers in this dynamic environment.

“While our in-stock levels are still not where we want them to be, we are maintaining the improvements we made over the last few quarters and building depth in key categories, as evidenced by inventory growing faster than sales compared to the same period last year.”

Chartering a vessel able to carry 3,000 20-ft containers costs around $40,000 a day, according to the Port of Los Angeles, reported NBC News.

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