OHIO-BASED women’s fashion giant Victoria’s Secret has been moving shipments away from air in favour of ocean transport, reports Washington, DC’s SupplyChain Dive.
Company finance and administrative chief Tim Johnson said Victoria’s Secret has been moving shipments away from air in favour as ocean freight rates stabilise.
The retailer expects the modal shift to help abate burgeoning costs. The company had seen supply chain costs rise by roughly US$300 million last holiday season due in part to a reliance on air freight.
Now, the company expects closer to $100 million in incremental supply chain costs from fall 2022 to spring 2023.
‘As we move into 2022 and the supply chain started to get incrementally better from a flow perspective, it gave us the confidence that we could start taking merchandise off of airplanes and start putting it on boats,’ Mr Johnson said.
Victoria’s Secret was nearly entirely dependent on transporting merchandise via air freight, especially during the holiday season. At the time, the company had ordered 200 million units of stock for the fall season, 45 per cent of which were delayed between two to nine weeks, said CEO Martin Waters.
‘In some cases, we won’t get the merchandise at all. So, all of our plans are being reworked, and 90 per cent of our merchandise will come in by air,’ Mr Waters said during the call. ‘In addition to that we have 100 vessels at anchor right now that are not coming to shore.’
