Burlington Bets on Ocean Contracts to Combat Elevated Freight Costs
Rising freight costs have become one of the most persistent headaches facing retailers in recent years. From pandemic-era supply chain disruptions to ongoing geopolitical tensions affecting global shipping lanes, the cost of moving goods from overseas factories to U.S. store shelves has remained stubbornly high. Burlington Stores, the off-price retail giant known for its deep discounts, is not sitting still. The company is taking a proactive, strategic approach to freight management — doubling down on long-term ocean shipping contracts and squeezing every inch of efficiency out of each container it ships.
Why Freight Costs Are Still Elevated for Retailers
Even as some supply chain pressures have eased since the height of the COVID-19 pandemic, freight costs remain a major line item for retailers that rely on international sourcing. Ocean shipping rates surged dramatically in 2021 and 2022, and while they pulled back somewhat in 2023, they have not returned to pre-pandemic norms. Factors like Red Sea shipping disruptions, port congestion, and fluctuating fuel prices continue to keep freight expenses elevated across the retail sector.
For off-price retailers like Burlington, which operate on tight margins by design, these elevated costs are especially consequential. Unlike luxury brands that can absorb cost increases through higher price points, off-price retailers must find ways to control input costs without passing them on to consumers — who shop there specifically for value.
Burlington's Playbook: Locking In Ocean Contracts
Burlington's Chief Supply Chain Officer, Greg Shultz, has been candid about the company's response to the freight challenge. Speaking with Supply Chain Dive, Shultz outlined a strategy centered on securing ocean freight contracts rather than relying on the spot market, where prices can swing dramatically based on short-term supply and demand dynamics.
By locking in contracts with ocean carriers, Burlington gains a level of cost predictability that is invaluable for financial planning and inventory management. Long-term contracts typically offer more stable pricing compared to spot rates, which can spike unexpectedly during periods of high demand or disruption. For a retailer that sources a significant portion of its merchandise from overseas markets — particularly in Asia — this kind of pricing visibility can make a meaningful difference to the bottom line.
The move also helps Burlington secure capacity. One of the painful lessons of the pandemic era was that shippers without contracts found themselves unable to secure space on vessels, even when they were willing to pay premium prices. Burlington's contract strategy helps ensure that goods keep moving through its supply chain on a consistent, predictable schedule.
Maximizing Every Container: The Cargo Density Advantage
Contracts alone are not the only tool in Burlington's freight cost-reduction arsenal. Shultz also highlighted a push to increase the amount of product packed and loaded into containers for both inbound and outbound shipments. This focus on cargo density — essentially fitting more product into each container — is a straightforward but highly effective way to lower the per-unit cost of shipping.
When a retailer can increase the number of units loaded into a single container, it spreads the fixed cost of that shipment across more products. Over thousands of containers and millions of units, even small improvements in loading efficiency can translate into substantial savings. This kind of operational discipline reflects a broader trend in retail supply chain management, where incremental gains in logistics efficiency are increasingly valued as a competitive differentiator.
Improving cargo density also has sustainability implications. Fewer containers moved to transport the same number of goods means a lower carbon footprint per unit — an increasingly important consideration for retailers navigating evolving ESG expectations from investors and consumers alike.
What This Means for Burlington's Competitive Position
Burlington operates in a fiercely competitive off-price retail landscape alongside rivals like TJX Companies (parent of T.J. Maxx and Marshalls) and Ross Stores. In this environment, supply chain efficiency is not just a back-office concern — it is a front-line competitive weapon. The ability to source merchandise cost-effectively and deliver it to stores efficiently directly supports Burlington's core value proposition: offering brand-name and quality goods at prices significantly below traditional retail.
By taking freight costs seriously at the contract and operational level, Burlington is working to protect its margins without compromising the deals it passes on to shoppers. That discipline is what allows off-price retailers to thrive even during periods of broader economic uncertainty, when consumers become even more value-conscious.
Broader Lessons for Retail Supply Chain Strategy
Burlington's approach offers a practical blueprint for other retailers grappling with elevated logistics costs. A few key takeaways stand out:
- Prioritize contract freight over spot market reliance: Long-term ocean contracts provide cost stability and capacity assurance, both of which are critical for retailers with complex international supply chains.
- Invest in loading and packing optimization: Improving cargo density is a low-tech but high-impact way to drive down per-unit shipping costs at scale.
- Treat supply chain as a strategic asset: Burlington's willingness to invest in supply chain leadership and discuss strategy transparently signals that logistics is viewed as a core business function, not just a cost center.
- Plan for ongoing freight volatility: Given that geopolitical risks, climate disruptions, and carrier capacity fluctuations are unlikely to disappear, retailers that build resilient freight strategies today will be better positioned for the future.
Looking Ahead
Freight costs are unlikely to return to the ultra-low levels seen in the years before the pandemic. The structural changes in global trade patterns, the ongoing rebalancing of ocean carrier capacity, and the persistent unpredictability of global events all point to a new normal in which logistics costs remain a significant variable for retailers.
Burlington's bet on ocean contracts and cargo efficiency is a measured, sensible response to this reality. By reducing exposure to spot market volatility and extracting more value from every container, the company is positioning itself to maintain the price leadership its customers depend on — even in a world where getting goods from point A to point B costs more than it used to. For the broader retail industry, Burlington's strategy is a timely reminder that in the current environment, supply chain excellence is not optional — it is essential.