American companies are scrambling to find ways to overcome historic shipping delays. FromWalmart IncLarge retailers such as Costco Wholesale Corp have chartered their own ships to avoid congestion at the port of Los Angeles ahead of the holiday shopping season.
For home improvement retail giantsThe Home Depot IncAt first, the idea was a joke, but now it has become a lifesaver to ensure the supply of some goods.
Sarah Gallika, the company's vice president in charge of transportation, said that in May, company executives were looking for new ways to ship goods to the port faster, and someone came up with the idea of chartering private boats.
"I think it almost started as a joke," she said. 'Let 's rent a boat.'"
In June, The Home Depot Inc not only chartered his own ship, but also airlifted goods such as power tools and snapped up goods on the spot market-which could cost as much as four times the previously determined contract price.
Although chartering ships accounts for a small portion of The Home Depot Inc's imports, Gallika says it helps the company prioritize goods and maintain inventory of the products it needs. According to her, the chartered ships help transport plumbing supplies, power tools, holiday decorations, heaters and other items.
The Home Depot Inc is one of many large retailers turning to chartering. Walmart Inc, Costco Wholesale Corp (Costco),Target Corp(Target) and Ikea have also adopted this approach. More. Lately,Coca-ColaIt also began to hire bulk carriers to transport raw materials, which are usually used to transport coal, iron and grain.
These chartered ships are much smaller than traditional container ships. By contrast, they carry an average of about 1000 containers, while traditional container ships can carry up to 22000 20-foot containers.
In August, Walmart Inc said smaller vessels were part of his plan to avoid major shipping routes such as Southern California and go to small ports with fewer delays.
Although these ships are small, they are expensive. Chartering a freighter that can carry 3000 20-foot containers costs as much as $40, 000 a day.
About 20-25 per cent of goods stranded on board will not be on the shelves in time for Black Friday on November 26, when the annual holiday shopping spree begins in the US, according to Strategic Resource Group, a retail consultancy.