Craft retailer Joann’s is counting on declining ocean rates for savings
Joann’s, the popular craft retailer that’s located in strip malls across the country, is looking to accumulate $15 to $20 million in savings within the next fiscal quarter. President and CEO Wade Miquelon is highlighting the company’s expectation of lower ocean expenses playing a big role in those financial goals. CFO Scott Sekella joined Miquelon on a Q3 earnings call, explaining that the company was hoping to amass a $200 annual cost reduction goal by the end of the fiscal year in 2025.
Falling ocean rates can help retailers save money by reducing the cost of transporting goods from overseas. When ocean shipping rates are low, retailers can import goods from other countries at a lower cost, which can help them reduce their overall expenses. For example, if a retailer imports a large volume of goods from China and the cost of shipping those goods by ocean freight decreases, the retailer will pay less for transportation. This can help the retailer increase its profit margin or pass on some of the savings to customers by offering lower prices.
Shipping a 40-foot container from Shanghai to New York now costs nearly $10,000, causing frustration among importers and talk of a market bubble.