The Wall Street Journal this morning reports that "global supply-chain delays are so severe that some of the biggest U.S. retailers have resorted to an extreme - and expensive - tactic to try to stock shelves this holiday season: They are chartering their own cargo ships to import goods … Walmart Inc., Home Depot Inc., Costco Wholesale Corp. and Target Corp. - some of the biggest U.S. retailers by revenue - are among the companies that are paying for their own chartered ships as part of wider plans to mitigate the disruptions, a costly and unattainable option for most companies. Some of the chains are passing along these added costs by raising prices for shoppers.
"The chartered ships are smaller than those that companies like Maersk operate and move just a small slice of total imports, the executives said. Ships that can hold around 1,000 containers are on average nearly twice as expensive as the cost of moving cargo on a typical 20,000-container vessel, according to freight forwarders.
"But the charters provide the big retailers with a way to work around bottlenecks at ports such as Los Angeles, by rerouting cargo to less congested docks such as Portland, Ore., Oakland, Calif., or the East Coast. It also could help retailers ensure that key products such as electronics and décor arrive for the holiday season."
- KC's View:
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One of the things that Amazon has invested in over recent years has been its own air force and navy, which enable it to exert greater control over its supply chain.
I have to wonder if the current moves being made by other big retailers will persuade them that this is an approach they should take long-term, not just as a response to supply chain snafus. If so, it then will be interesting to see if there are ways in which they can collaborate, creating alliances that will reduce their individual exposure.
