How bad is the container shipping crisis? So bad that The Home Depot has chartered its own ship.
This isn’t a joke. Between soaring freight rates, a lack of ship and container capacity, and never-ending port congestion, the world’s largest home improvement retailer with $132 billion in sales last year has resorted to chartering its own ship that will be 100% dedicated to the company.
The Home Depot’s President and Chief Operating Officer Ted Decker made the revelation in a recent interview with CNBC, providing some insight as to why retail giant is taking the unusual step of chartering its very own ship for the very first time.
“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,” said Decker.
According to Decker in the interview, supply chain disruptions have been so bad that the Home Depot opted, at least in some cases, to use more expensive air freight to fly in higher value items from overseas and even is buying items on the spot market in order to keep inventories stocked.
While questions remain about where Home Depot would obtain the actual containers or how the ship will avoid congestion, Decker did indicate that the charter is set to kick off almost imminently next month. Details about the charter, such as rate, length, and with whom, were also not disclosed.
Whether or not this strategy will pay off for The Home Depot is highly uncertain, but given “unprecedented” COVID-driven disruptions are growing at south China ports, perhaps taking some extra precautions now might not be a bad idea.
Mr Mike Schuler
Photo: NYC Russ / Shutterstock.com