German Retailer Lidl Charters and Buys Containerships for New Line

A week after the news came out that German retailing giant Lidl, part of the Schwarz Group, had filed a trademark to start a new shipping line to transport its goods, the company has reportedly reached agreements to charter three vessels and acquire a fourth. Based on current charter agreements for the ships, observers expect Lidl will launch operations for Tailwind Shipping Lines within the next few months.

The operator of hypermarkets in Europe is part of the fifth-largest retailer in the world and was reportedly seeking greater consistency and flexibility in managing parts of its supply chain. Reports from the German media suggest that Lidl will operate its ships alongside the major shipping companies and will continue to work with the carriers for a portion of its transportation needs. Lidl confirmed that in the future it plans to move a portion of its volume, which is reported to range between 400 and 500 TEU per week, on its own ships.

The retailer has reportedly according to consultancy Alphaliner chartered three smaller containerships for two years and will acquire the fourth ship outright. They are identifying the vessels being chartered coming from Hamburg’s Peter Dohle Schiffahrt which owns and manages containerships. Lidl is chartering the sister ships Wiking and Jadrana according to Alphaliner. Both vessels were built in China and delivered in 2014 and 2016. Each has a carrying capacity of 4,957 20-foot boxes or 2,430 40-foot boxes including reefer plugs for 600 containers.  Each of the vessels measures 836 feet in length and is 58,000 dwt.

Peter Dohle is also reportedly arranging for Lidl to purchase a third vessel the Talassia, built in China and delivered in 2005. The 68,288 dwt vessel can carry up to 5,527 20-foot boxes and has 500 reefer plugs. There were no details on the price being paid for the vessel.

Michael Vinnen, manager at F. A. Vinnen & Co. confirmed the media reports saying that his company has chartered the 51,000 dwt Merkur Ocean to Tailwind. On his LinkedIn account, he writes, “We are very much looking forward to be working with Tailwind Shipping Lines and are proud that they have chosen our vessel. So don't forget to shop at Lidl markets to keep our vessel fully loaded.” The Merkur Ocean has a capacity of 3,868 TEU including 500 reefer plugs.

Lidl has declined to provide details on its shipping plans but Alphaliner speculates the ships will be operating between Asia and Europe. The company has more than 11,000 stores reporting it is active in 32 countries, including an entry into the eastern United States in the past few years. They speculate that the first sailing will begin this summer.

The German newspaper Handelsblatt highlights that Lidl is not the first German company to seek out stronger control over their shipping. According to Handelsblatt companies including Esprit, Christ, Mango, Home 24, and Swiss Coop partnered using the Xstaff group to manage transportation. The company reportedly has undertaken several individual voyage charters for a vessel named Laila, a 2,700 TEU containership operated by CULines. However, Lidl is the first to buy a containership as well as take long-term charters on vessels.

 At the height of the supply chain disruptions and backlogs, a range of U.S. retailing companies reported that they had also chartered vessels to move goods from Asia, but again it was all short-term charters often using bulkers to fill the gap in container shipping capacity.