German retail giant Lidl is setting up its own shipping operation, Tailwind Shipping Lines, making it the latest retailer to try to take greater control of its shipping requirements to tackle supply chain problems and sky-high container shipping costs.
Last year, US retail giant Walmart revealed that it has chartered vessels to mitigate supply chain issues that are threatening its supply of goods, underlining the problems faced by the seafood industry in shipping products to customers and contract processors in far away time zones.
But Lidl is going a step further than rivals and plans to operate a shipping line under its own banner.
The supermarket chain has applied to the European Union Intellectual Property Office to use the Tailwind brand for cargo ship transportation, the delivery of goods and freight forwarding.
Lidl, which is part of the Schwarz retail group, aims to put its own ships into service by the middle of the year, according to German media sources.
Reports cite Wolf Tiedemann, who heads logistics at the German retailer, as saying the goal is “to manage the increased volume of different production facilities more flexibly in the long term."
He told the trade publication Lebensmittel Zeitung the company will continue to work with its usual shipping partners, but wants to be more independent.
Lidl is making the move after unsuccessfully seeking to invest in an existing shipping operation last year, the reports said.
Details on ships, routes and departure frequency have not yet been provided by the company.
Desperate end-users
Lidl is one of Europe’s leading retailers, with more than 200 warehouses and distribution centres in 30 countries.
Its move mirrors efforts by desperate end-users that have been wrestling with high freight costs and supply chain problems.
IntraFish sister publication TradeWinds has reported on a series of chartering and even newbuilding deals done directly between traditional liner shipping customers and shipowners or shipbuilders.
Due to a shortage of container ships, most of the vessels secured by retailers have been multipurpose vessels and small bulk carriers.
- Reefer: Refrigerated container
- teu: 20-foot equivalent unit used to measure container sizes
- feu: 40-foot equivalent unit used to measure container sizes
- Blank sailing: This could mean a vessel is skipping one port, or that the entire string is canceled.
- Panamax vessel: The maximum size of a ship that can transit the Panama Canal, ranging in length between 200 and 250 meters (650 and 820 feet) wth capacities of 50,000 to 80,000 dry weight tonnage.
Most recently, Shenzhen-listed manufacturer Loctek ordered for its own use an 1,800-teu container ship for a reported $32.6m (€29.9 million) from Huanghai Shipbuilding.
Others including Ikea, Costco and Home Depot have previously chartered vessels directly.
Coffee chain Starbucks has chartered MPP vessels for voyages, while soft drink giant Coca-Cola has chartered bulk carriers for palletized cargoes of artificial sweeteners that would normally have shipped in boxes.
Since the onset of the global COVID-19 pandemic more than two years ago, the seafood industry has suffered from soaring shipping rates and reduced shipping options as firms from all industries have battled for space aboard vessels.
The crisis began in early 2020 when containers became stranded in the wrong parts of the world from where they were needed due to congestion at ports sparked by COVID checks combined with spikes in demand for commodities and consumer goods, shipped particularly from China.
Read more
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- French processors warn Ukraine crisis is leading to 'brutal reduction' in seafood supply
- More than 3,500 tons of food destroyed in Viciunai warehouse bombing, as company continues to wind down Russian factory
- When will seafood firms finally put shipping disruptions behind them?
- Domino effect: How Putin's aggression will drive up salmon farming costs
