Costco Charters 3 Cargo Ships to Mitigate Container Shortages
The chip shortage is “impacting many items” at Costco, especially the in-stock availability of computers, tablets and videogame consoles, said Costco Chief Financial Officer Richard Galanti on a call Thursday for fiscal Q4 ended Aug. 29. “This will likely extend…
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into 2022,” he said. “We're ordering as much as we can,” as early as possible, he said. “Inflationary factors abound” from higher labor and freight costs, exacerbated by “container shortages and port delays,” he said. “We continue to work to mitigate cost increases in a variety of different ways and hold down and/or mitigate our price increases passed onto the members.” Costco has chartered three “ocean vessels” for the next year to transport containers between Asia and North America, “and we've leased several thousand containers for use on these ships,” said Galanti. “Every ship can carry 800 to 1,000 containers at a time and we'll make approximately 10 deliveries during the course of the next year.” Costco's electronics sales in the quarter were "very good," but up against a tough comparison with a year earlier when "we had really outsized sales," said the CFO.