Amazon Charters Cargo Vessels to Beat Supply Chain Chaos

Amazon, troubled by many logistical challenges, quietly started to charter cargo ships, produce its own containers, and lease planes. 

Accordingly, the initiative is to beat bottlenecks in delivery networks as the global markets grapple with supply-chain crunch.

Also, these costly moves will help the e-commerce giant avoid the most congested ports in the United States.

Nevertheless, Amazon still noted a 14.00% increase in out-of-stock items. At the same time, its management platform CommerceIQ cited an average price gain of 25.00% since January 2021.

In line with this, experts explained that the recent rise in the cost of transportation is usually passed down to the consumers. 

In 2020, Amazon spent more than $61.00 billion, significantly higher than the $38.00 billion in 2019.

At present, the company ships almost 72.00% of its own packages, surpassing its record of 47.00% over the last two years. 

Moreover, the retailer currently builds its 53-foot cargo containers in China. 

However, these holders are in short supply, leading to a price surge of $20,000.00 today from $2,000.00 before the onset of the pandemic. 

Still, Amazon has produced about 5,000 to 10,000 of these containers since 2019, ensuring the availability of items to its consumers.

Last 2015, it began operating as a global freight forwarder through a Chinese subsidiary.

This step assisted in moving goods worldwide for its Chinese sellers, dubbing this project as “Dragon Boat.” 

In addition, other highly-valued retailers, including  Costco, Walmart, Home Depot, Ikea, and Target, also began chartering their ships. 

In line with the holiday season, companies aim to bypass the busiest ports and get their goods unloaded sooner.

Amazon Faces Strain in Manpower

At the same time, Amazon faces strain in the workforce amid the great resignation, with many jobs going open and unfilled.

In the stated case, the e-commerce firm offered sign-on bonuses of up to $3,000.00 to 150,000 seasonal workers this year. Last 2020, it hired 100,000 seasonal workers.

Correspondingly, this strategy intends to fight the persisting worker shortage this holiday season.

Then, experts mentioned that the 50,000 increase in employees this year is for the unloading of goods from the  containers. 

In the pre-market trading, Amazon.com edged up 0.38% or 13.00 points to $3,402.79 per share. It slightly reversed its Friday decline of 1.38% or 47.57 points to $3,389.79 per share.