Costco to Rent Own Container Ships to Bypass Shipping Issues
Costco is renting its own container ships to prevent delays and keep costs down as the global shipping crisis continues, according to Business Insider. In a call with analysts Thursday, Costco CFO Richard Galanti said the retailer has chartered three ships to import products from Asia to the U.S. and Canada to help Costco avoid spending six times the normal price on shipping or containers through a third party, he said.
Each ship could carry between 800 and 1,000 containers at a time. Costco has also leased "several thousand containers for use on these ships," Galanti said. Costco is expected to make about 10 deliveries over the next year using these ships, accounting for about 20 percent of its imports from Asia, according to Business Insider.
Total Retail's Take: Costco is just one of many retailers trying to find ways to deal with an ongoing supply chain crisis that's causing delays and shortages for retailers and consumers alike. Several compounding issues are contributing to the supply chain disruptions that have retailers struggling to fill their shelves. They include port congestion (due to a lack of containers and dock workers), product scarcity, equipment shortages, truck and driver shortages, increased shipping costs and surcharges, and more.
Costco joins others in implementing the renting-a-container-ship approach. In June, it was reported that The Home Depot decided to contract its own container ship. The home improvement retailer made this decision amid global shipping issues such as congested ports, container shortages and slowed shipments as a result of COVID-19 outbreaks. It was the first time The Home Depot has reserved its own container ship, which will be 100-percent dedicated to the retailer.