Target, Walmart, Costco, Ikea charter ships to beat congestion

AMERICAN big box retailer Target has chartered its own cargo ship to get merchandise to the US ahead of the Christmas shopping season, reports New York's Business Insider.

Other big US retailers are also trying to sidestep shipping delays. Walmart announced last month was chartering small ships to dock at smaller ports where there is less congestion.

Costco, one of the largest wholesale retailers in the world, chartered three cargo ships to beat shipping delays and reduce costs over time, reported New York's FreightWave.

Target said the move was part of its preparation for the year-end surge, which also included ordering larger upfront quantities of items in and working with vendors to fast-track shipments to customers and work around "unprecedented supply chain challenges."

"As co-managers of the ship, we can avoid delays from additional stops and steer clear of particularly backed-up ports," Target said.

The retailer said it is encouraging customers to shop early, and announced deals and a new holiday price match guarantee to ensure customers get the gifts they need.

Other companies are also encouraging their customers to get into stores early this holiday season to offset the demand that is stunted by global shipping delays and supply chain issues.

The ongoing labour shortage is also making it difficult for retailers to hire seasonal holiday workers, forcing many companies, like Target, to add bonuses and other incentives to retain the help they need.

Costco Wholesale Corp has chartered three small ocean vessels for a year and leased several thousand containers to move export merchandise from Asia to the US and Canada, said Costco Wholesale CFO Richard Galanti.

The vessels can carry 800 to 1,000 containers and will each make about 10 trips during their one-year lease period, he said.

Their capacity is small compared to Costco's overall import volume but reflects the extreme tightness of the container shipping market and delays that have more than doubled delivery times for importers depending on the inland destination.

Major shipping lines are unable to meet commitments, even for customers as large as Costco because ports and distribution partners are overwhelmed with freight volumes, forcing vessels to wait at sea for up to two weeks at major ports.

"Containers, trucks and drivers all are impacting the timing of deliveries and higher freight costs. Despite all these issues, we continue to work to mitigate cost increases in a variety of different ways and hold down and/or mitigate our price increases passed onto the members," Mr Galanti said.

More than 60 container vessels are currently parked outside the ports of Los Angeles and Long Beach. Meanwhile, schedule reliability on the transpacific trade to the US west coast declined to an all-time record low of 33.6 per cent in August, according to data from Sea-Intelligence.

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2021/10/11 10:44:59