As part of its efforts to avert supply chain disruptions, Walmart now charters its own vessels. This supply chain disruption is a big threat to the industry for the holiday season.
The executive vice president of supply-chain operations at Walmart in the U.S. told Reuters that chartering vessels is one way to move products as fast as possible.
Among other things, the Covid-19 event has exposed the fragility of the world’s supply lines at a time when ports are backed up and ship space is scarce.
Several big retailers, including Target, Home Depot, Costco, and Dollar Tree, have reported they are chartering ships as well.
Marine Exchange of Southern California reports that more than 60 container ships are parked near the ports of Los Angeles and Long Beach awaiting unloading.
As the holiday shopping season draws closer, consumers are spending more on goods than going out, causing supply issues.
Cargo arrivals at the Port of Los Angeles are up 30% from last year’s record levels, and trucks and trains cannot keep up with demand, said Gene Seroka, the port’s executive director.
“It’s like taking 10 lanes of freeway traffic and squeezing them into five,” Seroka said.
Charter ships with cargo space and the ability to sidestep the overflowing ports, however, can play a critical role in moving time-critical goods.
In smaller terminals, there are fewer cranes and equipment, so they can only handle a certain number of containers per month.
