Recently, Home Depot (HD), one of the top three large importers in the US, announced that under the extreme situation of current port congestion, container shortage and COVID-19, it will lease a completely own freight, with 100% round-trip routes exclusively for Home Depot, in order to alleviate the current supply chain problems.
The ship will be operational next month.
Ted Decker, the company's president and chief operating officer, said the company's fiscal first quarter sales surged 31 percent from a year earlier, and continued to grow significantly as consumer demand surged and the chartering of ships was an unusual response to the company's supply chain challenges.
Home Depot already ships power tools, faucets, electronic components, fasteners and other "smaller, higher value items" by air, or buys them in the market spot, even at prices up to four times higher.
In such chaos, scale is an advantage, and wealth can be thick. According to Business Magazine's latest rankings, Home Depot is the third-largest importer in the United States, behind Wal-Mart and Target.
But there is only one home depot in the world that is so big.
Chinese exporters under suffering.
The Entertainer, a leading British toy chain, has decided to stop importing stuffed animals from China because of high retail prices, which have been hit by huge shipping costs."In 40 years in toy retailing, I have never encountered such a challenging situation."Says its founder Cary Grant.
One UK-based NVOCC said "outrageous rates" had led to many cancellations of orders from China, explaining: "This has had a big impact on retailers who are unable to raise prices."
Another UK freight forwarder said the market was "chaotic"."Imports for our customers are stagnating and smaller importers will go out of business," he said.In addition, importers are said to be looking to shift production back to Europe."
What about other exporters in Asia?
But Chinese exporters are not the only ones facing shipping problems.Exports from many countries were hit hard after the Indian epidemic "spread" to Southeast Asia.
Malaysia, for example.In an effort to contain the outbreak, Malaysia was under a complete lockdown from June 1 to 14. While cargo at the ports was allowed to operate, furniture factories were not allowed to operate, resulting in the detention of more than 2,000 containers of export goods from the furniture industry, amounting to over RM200 million.Lee Kwong Sen, deputy chairman of the Furniture Federation of Malaysia, said the total blockade could result in lost exports of between RM400 million and RM500 million.
South Korea is also facing a huge backlog of exports, even though the government has put in place policies to ease shipping problems.At the port of Busan, which handles more than 70% of South Korea's containers, so many containers are piled on top of each other that only narrow passages are left for trucks to pass through.
Due to the impact of "shipping delays", Hantai Tire, the tire company with the first market share in South Korea, stopped production for three days from June 10, due to the massive accumulation of tires in its warehouse and no storage space, so the factory had to stop operation and adjust its production capacity.
The shipping season is coming.
The National Retail Association forecast U.S. port container imports to remain above 2 million TEU(20-foot container) in each month from May to September, an increase from previous forecasts due to a gradual recovery in economic activity, but U.S. retailers' inventories remain at near 30-year lows and strong restocking needs will further boost cargo demand.
Jonathan Gold, vice president of supply chain and customs policy at the National Retail Association, said retailers are entering the peak season for shipping holiday merchandise, which begins in August.
And there has been rumors on the market, some ship companies are brewing a new round of price increases in July.
According to the latest news, Yangming Shipping issued a notice to customers on June 15, indicating that the price increase for the Far East to the United States line will be raised on July 15, with an additional $900 per 20-foot container and $1,000 per 40-foot container for the Far East to the West, Far East to the East and Canada.
This is the third time in half a month that Yangming has raised prices.The company announced on May 26 that it will increase GRI to $1,000 for each 40-foot unit and $900 for each 20-foot unit effective July 1.On May 28, customers were again notified that an additional consolidated rate increase surcharge (GRI) of $2,000 per 40-foot container and $1,800 per 20-foot container would be imposed from July 1;June 15 was the latest increase.
From July 1st, MSC will raise prices for all routes exported to the US and Canada by US $2,400 per 20-foot container, US $3,000 per 40-foot container and US $3,798 per 45-foot container. The price increase of US $3,798 per 45-foot container is the highest in shipping history.
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