Retailer Home Depot Charters Boxship to Maintain Supply Chain
After months of reports of capacity and equipment shortages highlighting the challenges retailers are having getting merchandise to their stores, one of the largest big-box stores in North America, Home Depot, has taken the extraordinary step of chartering a containership to maintain its supply chain. It is the first time in the company’s 40-year history that it has gone to such extremes to fill its shelves.
The home improvement’ retailer ranks as one of the largest importers. With nearly 2,300 stores in the U.S., Canada, and Mexico, Home Depot generated over $132 billion in revenues in 2020. The home improvement sector continues to be one of the hottest segments, with consumers deciding to make changes as they spent months at home during the pandemic.
With sales rising over 30 percent in the first quarter of 2021, Home Depot has a voracious appetite for merchandise to keep its stores and warehouses full. Each store stocks approximately 35,000 products, the company reports, with a total of more than one million items listed in its online store.
President and Chief Operating Officer Ted Decker told CNBC that the company has already taken usual steps to maintain its merchandise inventories and get products on the shelves during the disruptions to the global supply chain. He said Home Depot has purchased merchandise at higher costs in the open market beyond its contracted suppliers. The company has even resorted to flying smaller, higher value items, such as power tools and electrical components, by air freight to make up for shortfalls in supply.
Describing the company’s latest efforts to maintain its supply lines, Decker told CNBC, “We have a ship that’s solely going to be ours, and it’s just going to go back and forth with 100 percent dedicated to Home Depot.” He did not identify the size of the boxship or which carrier they are chartering the vessel from, nor the length of the charter. He said it would start running next month, but did not specify which routes or ports.
Last week, the National Retail Federation forecast that the U.S.’s major ports were on track for record volumes in 2021 driven in large part by retail merchandise imports. The NRF in its monthly Global Port Tracker projected that container volume would remain above 2020 levels at least until the fall but might see a slight decline in volumes versus 2020 before retailers begin stocking up for the holiday retailer season.