GSCW: Walmart beats Amazon in circumventing port congestion, analyst says

Date: Tuesday, March 2, 2021
Source: Freightwaves

In the battle between retail giants, Walmart (NYSE: WLM) is doing a much better job than Amazon (NASDAQ: AMZN) in avoiding U.S. port congestion and import delays, according to data compiled by Import Genius.

Walmart has been able to spread its ocean container imports to many ports across the country, including Houston; Norfolk, Virginia; and Savannah, Georgia, while Amazon shipments from Asia remain highly concentrated at the twin ports of Los Angeles and Long Beach, where COVID-related shortages of dockworkers have prevented terminals from clearing out containers and ships are stacking up in the harbor waiting for a berth.

“It looks to me like Walmart is handling both COVID and the congestion much more smoothly than Amazon is,” William George, an analyst at Import Genius, said Monday in a presentation during the FreightWaves Global Supply Chain Week event. “And I think this has to do with just the depth of expertise that Walmart has in their supply chain. They have so many years worth of experience. It’s a very mature supply chain.”

Walmart also has about 150 import distribution centers, compared to about 100 for Amazon, which gives the Bentonville, Arkansas, retailer the ability to enter shipments in multiple locations. “All of those things let you diversify and shift when you find pressure in certain points. You can ease the load,” he said.

Walmart is affected by the supply chain disruption, too, but it doesn’t have as much cargo stuck offshore as Amazon does.

Amazon’s ocean import volumes handled by Beijing Century Joyo, Amazon’s in-house ocean consolidator, dropped 42% between August and January because so many backed-up orders from China are taking weeks longer than normal to clear U.S. ports. Just as striking, the number of twenty-foot-equivalent units imported by Amazon overall through LA/Long Beach fell 17% from November to January, which is typically a retail high point to stock stores for Christmas and other holidays, according to the Import Genius data.

One way Amazon is adjusting is sending more containers to the Port of Baltimore, where it has four nearby distribution centers. Amazon imports in Baltimore exploded last summer “and I expect to see something very similar to this over the course of 2021,” George said.

One reason for the massive import jam is that two-thirds of Easter-related shipments from China, Hong Kong and Taiwan are going to the West Coast, with 80% of that amount in Southern California.

George also described how Amazon uses its Chinese NVO, Beijing Century Joyo, to carry products for third-party sellers, further evidence that Amazon is now providing extensive logistics services beyond its four walls. Amazon’s own orders make up about 80% of the volume booked by Beijing Century Joyo, with the remaining bills of lading listing freight forwarders as the consignee.

“They are obscuring both sides. You can’t see the shipper or the buyer,” George said. “It’s likely those are third-party shipments.”

Walmart and Amazon are the two largest global retailers, respectively, by sales.


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