Supply crisis and congested transportation forced Walmart to hire its own ship to carry goods - risky retail industry

An unprecedented phenomenon, dozens of container ships are stranded at US West Coast ports. US retail giants are having to charter their own ships amid a tight supply of goods, as companies have to depend on supplies in Asia while the festive season is approaching. Shipping traders can make even more money when container prices spike.

The Flying Butedly once sailed across the oceans carrying important commodities, such as grain, to all corners of the world. Now, it carries other "treasures": the tower toys from the cartoon Paw Patrol, the car from the cartoon Batmobile Transformers and the Baby Alive Lulu Achoo doll….

The ship, which used to carry bulk cargo, has now switched to a service contract with retail giant Walmart. America's largest grocery retailer and one of the world's largest companies is chartering its own cargo ships in an effort to combat disruptions to global supply chains that threaten to destroy The retail industry has the most favorable business capital during the festive season.
Joe Metzger, walmart account management's executive vice president of supply chain operations, said: "Self-service chartering is just one example of the investments we've made to ship products as quickly as possible. to bypass congested ports and be proactive in the face of a shortage of ships due to COVID-19, as well as the US-China trade war, vehicle shortages and extreme weather… All for see the fragility of the globally stretched supply networks we use for everything from food and fashion to drinks and diapers.More than 60 container ships carry clothing, furniture and electrical goods. Billions of dollars worth of dead bodies are stuck outside the ports of Los Angeles and Long Beach awaiting unloading, according to the Marine Exchange of Southern California.

Before the pandemic, it would be very unusual to have a ship lying in the waiting lane for a long time at America's No. 1 port complex, which handles more than half of the world's No. 1 economy's total imports.

Other major retailers, such as Target, Home Depot, Costco and Dollar Tree, say they are also having to charter their own ships to deal with delays in ocean freight networks - handling systems. 90% of world trade in goods. Caused by the COVID-19 pandemic.

The CEO of shipping consulting firm Ocean Audit, Steve Ferreira of shipping consulting firm Ocean Audit, describes the growing concern with the word "Containergeddon."
The traditional flow of US retailers from Asia is being "frozen" due to the rebound in trade activity after the COVID-19 period in countries such as Vietnam and Indonesia, plus the shortage crisis. electricity in China. Unstable supply coupled with explosive demand as consumers spend more on goods instead of going out, and the festive season - when "crazy" shoppers are approaching.

Burt Flickinger, chief executive officer of retail consulting firm Strategic Resource Group, says at least 20-25% of goods are stuck on ships unlikely to hit shelves in time for the start of the shopping season in the UK. The year-end holiday falls on Black Friday, November 26 – a time when retailers used to make more than a third of the year's profits.
Typically each year Walmart ships those toys from China to Los Angeles in hundreds of 40-foot (12-meter) crates stacked like colorful Lego bricks aboard giant container ships serving customers.

But 2021 is no ordinary year. Cargo arrivals at the Port of Los Angeles are up 30% from last year's record levels. Port chief executive Gene Seroka said trucks and trains couldn't unload quickly enough, leading to congestion at the port, while consumer demand increased rapidly.

"That's like squeezing 10 lanes on a highway into five," Mr. Seroka said. Vessels chartered by cargo carriers that have both cargo space and can avoid container terminals - play an important role in this second holiday season amid the pandemic, especially for cargo. time-sensitive like Christmas sweaters - won't sell if they arrive too late.

However, the global supply crisis is presenting huge lucrative opportunities for Walmart Listing. They are bouncing back as container shipping prices spike to record highs, with freight costs exceeding $20,000 per barrel on the heaviest vessels.

Global container shipping companies, such as AP Moller Maersk and Hapag Lloyd, are making a fortune from skyrocketing freight rates. Some shipping industry sources say that not only Walmart, other companies are also hunting for second-hand container ships of all sizes, Hapag Lloyd chief executive Rolf Habben Jansen said.