Global Supply Chain: Big Box Retailers Charter Cargo Ships to Prepare for Holiday Surge

Global Supply Chain: Big Box Retailers Charter Cargo Ships to Prepare for Holiday Surge
October 4, 2021 Aldo Flores

It’s no secret that the global supply chain is in chaos and has been for months. Thousands of shipping containers are gridlocked at both the Long Beach and Los Angeles ports. The crisis started during the initial Covid-19 outbreak and has since worsened.

The jam is attributed to a perfect storm of contributing factors. First, there was a back order of goods after Asian factories shut down during the initial Covid-19 outbreak. Once shipping resumed, ports were swamped with deliveries and faced major labor shortages due to the pandemic. Experts believe the problems at the ports could last for years— causing some big box retailers to take matters into their own hands.

Costco has chartered three cargo ships to transport goods from Asia to North America. The retail giant said the cargo ships will be chartered for the next year and each load will carry 800-1000 shipping containers per load. The ships will make at least 10 deliveries. The company is hoping to get ahead of the holiday surge by stocking up on toys, consumer goods, and other hot holiday items.

Other retailers, like Home Depot, have also chartered ships.

“We have a ship that’s solely going to be ours and it’s just going to go back and forth with 100% dedicated to Home Depot,” President and Chief Operating Officer Ted Decker told CNBC.

Other major retailers like IKEA, Target, and Walmart are also chartering their own cargo ships.

This move will hopefully keep shelves stocked during the holiday season, but it will come at a cost. Increased shipping costs combined with a shortage of seasonal workers will most likely mean higher costs for end consumers. Experts say the best way to shop this Christmas is to hit the stores early and try to wrap up holiday shopping before Black Friday.

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