Will shippers consider container vessel chartering as a long-term supply chain strategy?

Amazon has chartered ships of G2 Ocean shipping company to transport goods (Image: G2 Ocean)

The phenomenon of large retailers such as Home Depot and Ikea chartering their own container ships has attracted a lot of attention and is seen as a sign that bottlenecks and how serious supply chain disruptions have become.

Speaking at a High-Level Maritime Dialogue organized by FIATA last week, James Hookham, Director of GSF spoke of the “Great Shipping Crisis of 2021”, and many said that it will continue for different periods of time.

The Global Shippers Forum (GSF), which represents shippers' interests and their dealings with shipping lines, has found itself in a somewhat unusual position that some of its members are now also on the other side of the fence operating chartered in container vessels.

“There is, of course, that small heroic band of shippers out there who made the trip to the Dark Side during 2021 and hired their own vessels to move their own goods, because shipping line predictability had got so bad, and freight rates so out of kilter with actual operating costs,” says Hookam.

The Home Depot (Photo: Raysonho)

There has long been speculation that Amazon might enter the ocean shipping space, in part shown by the company that signed up for NVOCC a few years ago. But until the recent crisis retailers actually operated container ships simply as a speculative concept.

Recent comments by the Port of Los Angeles CEO Gene Seroka - indicate that new entrants are finding it difficult - to get on board ships in Asia and ship across the Pacific and then booked when many ships were found stranded in San Pedro Bay for weeks waiting with other longtime customers - major shipping lines.

While some of these new entrants are small shipping lines, they also include large retailers, although Seroka did not name them directly.

Hookam concludes: “I don’t know what their charter terms are, or what their experiences have been, but I expect they will soon be needing to decide whether to ‘give up the hobby’ or make it a part of their routine operations. These endeavours have been dismissed as an aberration by most shipping industry observers, but it tells you something when a few guys in the audience think they can whistle a better tune than the full orchestra!"

Whether large retailers have made the easy decision to incorporate this into their core business in the long run or see value in having direct control of their entire supply chain - Only time will tell.

See more:

• Many shippers will restructure their supply chains and charter ocean capacity direct
• Global supply chain disruption expected through 2022
• Costco charters three container ships to transport cargoes themselves
• Home Depot charters container ships to solve supply chain bottlenecks
• Amazon, Ikea, Unilever... join the coZEV project - Cargo Owners for Zero-Emission Vessels

Source: Phaata.com (According to SeatradeMaritime)

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