- Loctek has a $32.6 million contract with Huanghai Shipbuilding to build a 1,800 TEU cargo ship.
- The company said it made the purchase to combat shipping delays and meet a surge in online sales.
- The furniture maker is one of many companies to take extra steps to avoid historic shipping delays.
Furniture maker and retailer Loctek is in the process of building its own container ship.
The furniture company, known for its ergonomic designs, is paying Huanghai Shipbuilding $32.6 million to build a new container ship, TradeWinds first reported. Loctek revealed the purchase in a regulatory filing with the Shenzhen stock exchange. The ship will be able to carry 1,800 20-foot containers and is expected to be delivered by March 31, 2023.
Loctek said that it made the purchase "in order to enhance the company's competitiveness and accelerate the company's overseas business development," according to the filling. The company said its online sales have surged, but shipping delays have made it more difficult to deliver its goods efficiently. By owning its own vessel, the company hopes to avoid high freight rates and improve its delivery windows.
The company did not specify whether it would operate the ship or pay a major shipping company to run the ship and transport Loctek products.
Loctek is one of many companies to find creative measures to sidestep historic shipping delays. Last year, several major retailers began chartering cargo ships.
In the Fall, Coca-Cola, Target, and Costco revealed they had begun chartering bulk freighters usually reserved for hauling raw materials like coal and grain. In August, Walmart announced it was chartering smaller vessels in order to avoid backlogs at ports in Southern California. Meanwhile, Lululemon and Home Depot told investors they had begun relying more heavily on air cargo to deliver goods on time.
As supply-chain snags continue into 2022, retailers may have to continue to find new ways to avoid major delays. Douglas Kent, executive vice president of strategy and alliances at Association for Supply Chain Management, previously told Insider that the shipping crisis will likely bolster the dominance of big-box retailers.