Home Depot (NYSE: HD), one of the biggest U.S. importers, revealed it has chartered its own vessel amid continuous shipping delays and container shortages brought on by the Covid-19 pandemic. This will be the first time the company takes this type of approach.
“We have a ship that’s solely going to be ours and it’s just going to go back and forth… 100% dedicated to Home Depot,” President and Chief Operating Officer Ted Decker said. Decker says that the contracted boat will begin to run for the company in July.
Amid the ongoing pandemic, Home Depot has been forced to take unordinary measures as it strives to deliver its goods to customers. The company has even resorted to flying in power tools, faucets, electrical components, fasteners and other “smaller, higher value items” by air freight, Decker said. Additionally, it has also purchased items on the spot market, which sometimes has a cost four times greater than contracted prices.
Similarly, other retailers have struggled and deviated from their usual measures in order to fill stores as well as distribution centers. Consequently, customers are experiencing out-of-stock items, lengthy shipping delays and an increase in prices.
“Retailers are struggling to maintain pace with the high level of consumer demand and have not yet begun to build up sizable inventory,” analysts Frode Morkedal and Omar Nokta added.
The shipping frenzy has surged at an important time within the industry, according to Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, a trade group.
“Right now, they are all trying to figure out ‘How do we mitigate that risk to make sure that we’ve got the product here in time for when those holiday season sales start?’” he said. “That could mean moving up timing for when you bring your product in, which could further lead to additional congestion and delays.”