Siddharth Cavale, Jonathan Saul, Lisa Baertlein

LOS ANGELES (Reuters), The Flying Buttress was once a glider that carried vital commodities, such as grain across oceans.

It now bears an entirely new treasure, Paw Patrol Movie Towers. Batmobile Transformers. Baby Alive Lulu Achoo dolls.

Walmart has drafted the dry bulk cargo ship into its service. In an attempt to combat the disruptions in global supply chains that could threaten the industry’s holiday season, Walmart is chartering its own vessels.

Joe Metzger from Walmart USA, the U.S. executive Vice President of Supply-Chain Operations, stated that “chartering vessels” is one example of investment made by Walmart to ensure products move as rapidly as possible.

It is hoped that the plan will allow for the bypassing of log-jammed ports as well as secure limited ship space in a time where COVID-19 and U.S.-China txt ructions, severe weather and equipment shortages have highlighted the fragility and vulnerability of global supply lines used to transport everything, from food, fashion, to beverages, and even diapers.

According to the Marine Exchange of Southern California, more than 60 containers carrying electronics, clothing and furniture worth billions of USD are awaiting unloading at Long Beach and Los Angeles terminals.

Pre-pandemic, it was unusual for more than one ship to be  in the  waiting lane at the No. The U.S. Port Complex 1 handles over half the American imports.  

Others big retailers include Target (NYSE:) Home Depot Costco (NASDAQ :), Dollar Tree (NASDAQ 🙂 all stated that they have begun chartering ships to address the global pandemic and slowdown in sea trade.

Oder, Steve Ferreira from shipping consulting firm Ocean Audit calls the growing concern “Containergeddon”.

Due to the resurgence in COVID-19, in Vietnam and Indonesia, as well as a Chinese power shortage in China, America’s traditional source of income from Asia has been cut off. With booming consumer spending, more people are shopping online and less on the streets, supply is snarling.

Burt Flickinger, managing director at retail consultancy Strategic Resource Group, said at least 20-25% of the goods stuck on ships were unlikely  to make it onto shelves in time for the Nov. 26 Black Friday kickoff for the holiday shopping season, a period when retailers make more than a third of their profits.

ROUTE TO GREAT PROFIT

These chains hold the greatest power.

Walmart would transport the toys each year from China in hundreds of forty-foot (12-meter) cargo boxes. These containers are stacked with colorful Lego bricks onto huge container vessels, which serve several customers.

However, 2021 is not a typical year. At the Port of Los Angeles, cargo is now up by 30% compared to last year’s record numbers. The surge in consumer demand means that trucks and trains are unable to move it quickly enough.

Seroka explained, “It is like taking 10 lanes in freeway traffic and forcing them into five.”

The second pandemic holiday season will be dominated by chartered ships, which can provide valuable cargo space and bypass the container terminals. This is especially true for goods that are time sensitive such as Christmas sweaters. They won’t sell if it arrives too late.

On Aug. 21, the Flying Buttress arrived in Los Angeles. The Flying Buttress got stuck outside of the port, but it cleared the clogged terminals. It then unloaded its cargo at an independently operated bulk cargo dock near Los Angeles on Aug. 31, according Refinitiv data.

Walmart used larger 53-foot containers to circumvent the 40-foot container shortage that is common for global shipping.

Home Depot, among others, is also in the shipping business. Home Depot stated that they were “creatively trying to get additional capacity”.

Home improvement retailer avoided Los Angeles gridlock and sent its Great Profit charter vessel nearly 125 miles south towards San Diego.

Ocean Audit CEO Ferreira stated that on Sept. 15 the ship’s onboard cranes lifted 7-foot Halloween spellcasting witches, Christmas lights, as well as other holiday decor, onto docks. This was to help shipping customers return overpayments.

This is the final stretch. Retailers are doing everything they can to succeed in an extremely competitive market, he stated.

WHY DOES PORT SIZE COUNT?

However, there are limits to these workarounds.

Great Profit can be moored at the terminal, which handles all things from sugar to windmill blades. However, it is limited to 500 containers per month and only one or two ships per month, according to Greg Borossay. Borossay is the port’s principal for maritime business development.

San Diego doesn’t possess the tall gantry cranes required to remove large ships from their cargo containers. Specialized cargo such as autos, is allowed to travel by rail. The roads surrounding residential and commercial areas don’t have the infrastructure to support the trucks that transport thousands of containers across the country.

Borossay stated that “we’d be a very unhappy society if we had 3000 (boxes),” Borossay agreed.

Many retailers are not willing to hire shipping companies for support of sales. There could also be other important factors that can influence the selection of potential winners and losers.

Even though sales are increasing, clothing and accessory retailers have had their inventory declines. This has fueled concerns about potential sell-outs. Jason Miller is an associate professor in logistics at Michigan State University. 

He said that general merchandise retailers such as Walmart and Target have done better at keeping their inventory up to date with sales.

PAYMENT $20,000 PER CONTAINER

Bulk cargo ship operators are gaining lucrative business opportunities from the global supply crunch. However, they have been able to cash in on record container shipping rates. This has resulted in freight costs exceeding $20,000 for large liner vessels.

Global shipping companies like AP Moller Maersk or Hapag Lloyd are thriving on the high rates. Rolf Habben Jansen, CEO of Hapag Lloyd said that major lines “are putting in every ship they can find”.

Multiple shipping sources claimed that other businesses were buying up container vessels in all sizes.

Taylor Maritime, a Hong Kong company that manages Flying Buttress according to shipping databases, didn’t respond to a request to comment.

It takes dry bulk truckers a very brief time to build decks that can safely transport and secure cargo boxes. This type of transport usually involves cargo holdings below the deck.

Genco Shipping (NYSE:) & Trading is seeking approval from its ship safety certifier to prepare some of its own dry bulk vessels to carry containers.

Genco won’t go all in on container shipping. CEO John Wobensmith said that the company is “opportunistic”.

Cargill, an agribusiness company, said that some dry bulk vessels it charters could be used to store containers as well, even temporarily, in order to reduce bottlenecks.