“Since the outbreak of Covid-19 in 2020, the efficiency of worldwide ports has been low and this has affected the supply chain.”
This congestion in supply chain and global shipping has fed up Chinese manufacturer and retailer, Loctel, so much so that it orders its own container ship to carry the ergonomic furniture and equipment.
“The company plans to sign a 1,800 TEU containership construction contract with a domestic first-class shipyard,” reported Loctel in its stock exchange filing.
The contract has finally been signed with a domestic shipbuilder, Huanghai Shipbuilding, located in Shandong Province, China. The cost of the vessel is estimated to be $32.8 million and the delivery for which is scheduled for March 2023.
The reason to become a shipowner, as told by Loctel is to “further enhance the company’s competitiveness and accelerate the development of its overseas business”.
During covid times, online trading and global e-commerce have observed a huge surge. This has equally benefited the online trading business of Loctel and thus, the need to deliver the products to the customers also becomes exceedingly high.
It is to meet this need to deliver at all the expected places in a short period of time, Loctel also plans to incorporate the warehouse along with the logistics services and shipping.
Being the first to invest in new buildings and owing to its own vessel, Loctel also has better control over freight costs. Many other small manufacturers have complained against the shipping companies regarding difficulty finding space, the constant delays in delivery, lack of capacity, and high fees per carriage. This investment in owning a ship would prove beneficial after all.