A truck driver works in front of shipping containers stacked up at Pusan Newport Terminal in Busan, South Korea, July 1, 2021. Picture taken on July 1, 2021. REUTERS/Kim Hong-Ji
(Bloomberg) — Shipping costs and lag times are wreaking havoc on profit margins at Dollar Tree Inc., which relies on a steady volume of cheap goods to make money at low prices.
A global rebound in consumer demand for all sorts of goods is putting strain on shipping networks and ports. And new surges in Covid-19 cases have caused some ports to close or slow down entry. Transit times are about 30 days longer than in recent years, Dollar Tree said Thursday, citing freight industry contacts. That’s tough for a company that brings in almost 90,000 40-foot containers a year.
In a recent case, Dollar Tree had a dedicated charter vessel turned back from a port in China because a single crew member tested positive for Covid-19, Chief Executive Officer Mike Witynski said on an earnings call. The voyage was delayed by two months because the ship had to go to Indonesia and replace the entire crew.
“We believe the Dollar Tree banner imports more containers per $100 million in sales than other large retailers, and combined with our low $1 price point, we have an outsized impact from freight costs,” Witynski said. The company’s second-quarter sales missed analysts’ estimates, and its forecast for the current quarter disappointed, sending the shares down as much as 11%.
© 2021 Bloomberg L.P.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 110,099 members that receive our newsletter.
Have a news tip? Let us know.
A rapidly intensifying weather system, known as a “bomb cyclone,” has developed off the U.S. West Coast, creating perilous conditions for mariners and coastal communities in the Pacific Northwest. The...
The long-awaited MV Glen Sannox, under construction at Scotland’s Ferguson Marine shipyard, has officially received regulatory approval to carry passengers. The Maritime and Coastguard Agency (MCA) and Lloyd’s Register have issued...
New EU and British sanctions are based on false claims of missile transfers to Russia and are "unjustified," Iran Foreign Ministry spokesperson Esmaeil Baghaei said on Tuesday.
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 110,099 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
