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How Amazon is beating supply chain chaos with its own containers, chartered ships and long-haul planes

As supply chain chaos causes shipping delays this holiday season, experts say Amazon's logistics empire and predictive analytics will allow it to avoid the worst of it. Amazon leased long-haul planes to get goods from China to the U.S. faster, and its been making its own containers and chartering private cargo vessels for years. Now retailers like Walmart, Home Depot, Target, IKEA and Costco are trying out the tactic, chartering smaller vessels to bring goods to less congested ports.
15:45
Sat, Dec 4 20218:59 AM EST

Supply chain chaos has retailers and consumers in a panic this holiday season, but Amazon has made some bold and costly moves to avoid the worst of it.

Huge 14,000-container ships are waiting up to 45 days for available dock space and workers to unload their goods at the country's busiest ports of Los Angeles and Long Beach. Meanwhile, experts say Amazon has its goods unloaded in as little as two days, largely because it predicted the supply chain chaos and was able to plan ahead months before other retailers.

The first bottleneck in the supply chain is the container shortage, which has caused container prices to soar from less than $2,000 before the pandemic to $20,000 today. So Amazon is making thousands of its own 53-foot cargo containers in China, shipping them to less congested ports like Houston, where a vessel filled with Amazon containers arrived on October 5, 2021.

Amazon has been experimenting with chartering private container ships since 2017, quietly acting through a Chinese subsidiary as a global freight forwarder to help move goods across the ocean for its Chinese sellers who pay to be part of the Fulfilled by Amazon program. Internally, Amazon dubbed this project "Dragon Boat."

This season, a handful of other major retailers — Walmart, Costco, Home Depot, Ikea and Target — are also chartering their own smaller vessels to bypass the busiest ports and get their goods unloaded sooner. For some of the highest margin goods, Amazon is avoiding ports altogether by leasing long-haul planes that can get smaller amounts of cargo directly from China to the U.S. much faster.

Watch the video to learn more about how Amazon predicted the supply chain crisis and all the ways it's avoiding the worst shipping delays.