Home Depot Reserved its Own Ship Amid Global Shipping Challenges

The Home Depot made the decision to contract its own container ship, CNBC reported. 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.

Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, told CNBC that many product categories are facing these shipping challenges, including apparel, footwear, consumer goods and electronics.

This is the first time Home Depot has reserved its own container ship, which will be 100 percent dedicated to the retailer. Ted Decker, president and COO of Home Depot, told CNBC that the ship will begin running next month and is only one example of the solutions the company developed to cope with the global shipping challenges. Previously, Home Depot flew in power tools, electrical components and other small items by air freight, but this was on rare occasions.

While there are many factors contributing to the global shipping dilemma, one in particular is the recent COVID-19 outbreak in southern China. Some ships have had to skip over certain ports due to restrictions put in place to slow the spread of the outbreak.

Total Retail's Take: Many consumers invested in home improvement projects while being stuck in their homes these past 16 months, and Home Depot was unprepared by the uptick in demand. It's certainly not the only retailer dealing with these shipping problems, but The Home Depot's size and resources gives it a competitive advantage against other players in the home improvement space. Only the biggest of organizations have the capital to reserve its own container ship solely for its own use. Compounding the problem for retailers not named Home Depot is that these shipping challenges are occurring as brands begin to stock up on merchandise for the upcoming holiday shopping season, and as consumers are getting increasingly frustrated with out-of-stocks and long delays for backordered products.