For discount retailers, weak ocean shipping reliability is no longer just a procurement headache. Pepco Group is a current case study.
Reuters reported on September 21 that the Warsaw-listed discount retailer is leaning on long-term freight contracts and a new distribution hub near Gdańsk, Poland, to soften the effect of higher shipping costs and wider supply-chain disruption.
The hub is not just extra warehouse space. Part of the Gdańsk site will operate as a deconsolidation centre, allowing Pepco to unpack containers and decide where goods should go after they arrive, according to Reuters. Previously, those calls were made while stock was still in Asia.
That later decision point is the business shift. For a retailer operating more than 4,000 stores in 19 European countries, the ability to redirect goods after arrival can protect store availability when vessels arrive late, miss connections, or reach Europe in a different order than planners expected.
The pressure is showing up in reliability data
Pepco logistics director Martin White told Reuters that current conditions were unlike anything he had seen in 45 years in supply chain work, citing forced route changes and typhoons in China that stranded Pepco freight in Shanghai in August. Reuters also clarified that the roughly 35% on-time figure cited in the story referred to overall container shipments, not a Pepco-specific reliability rate.
Sea-Intelligence reported that global container schedule reliability fell to 56.4% in July 2026, down 6.1 percentage points month over month and the lowest level of 2026. It also said the average delay for late vessel arrivals rose to 6.06 days, the highest level since January 2024.
A separate Sea-Intelligence release tied July’s reliability decline primarily to congestion across major Asian ports. Shanghai’s on-time vessel arrival rate fell to 21.0% in July, while all 14 of the busiest Asian ports in its analysis recorded lower on-time arrivals.
Kuehne+Nagel’s seaexplorer report, using its own methodology, put global on-time performance at 51.7% in August and said Asia-linked trades continued to face pressure. The figures are not interchangeable, but they point in the same direction: retailers that import goods through major container routes are planning against weaker reliability, not just higher rates.
Drewry added another port-side view in late August. Its market signals summary found longer global average waiting times and falling containership schedule reliability, and its analysis said ship waiting times had nearly doubled between the first seven months of 2019 and the first seven months of 2026. Drewry also said average time spent by containerships in port had risen 31% over that period.
Freight contracts are becoming part of price strategy
Reuters reported that Pepco chief executive Stephan Borchert said longer-term contracts were helping the company mitigate cost peaks and that Pepco had secured container agreements extending beyond next summer. That matters because Pepco competes in a crowded discount retail market where logistics efficiency supports the low-price offer.
Freight planning is therefore moving closer to pricing strategy. A delayed seasonal container can become a markdown problem. A more expensive route can become margin pressure. A missed store replenishment window can become an availability issue at exactly the point when customers are comparing prices.
Borchert also told Reuters that Pepco would try to avoid passing higher costs to customers, while considering price increases selectively if the wider industry was forced to move. That is a cautious stance, but it shows the commercial chain: unreliable shipping affects freight costs, freight costs affect margin, and margin pressure eventually tests customer pricing.
Pepco is not simply adding more stock
The traditional answer to late freight is more buffer stock. Pepco’s current approach is more targeted. Reuters reported that Borchert said the company was not building up extra inventory buffer, relying instead on better tracking and long-term freight deals.
That does not mean Pepco never carries more inventory. In March, Pepco Group said it had healthy stock availability across distribution centres, partly because shipped inventory was higher than the same period a year earlier due to earlier Chinese New Year and Easter timing. It also said roughly 95% of imported product volume was routed around the Cape of Good Hope through regular sea freight under contracted rates and capacity.
The newer signal is more specific. Pepco is presenting visibility, contract coverage, and later allocation as the main controls, rather than treating broad safety stock as the answer to every delay. That distinction matters because extra inventory can protect sales, but it also ties up cash and increases markdown risk if seasonal goods arrive at the wrong time.
The Gdańsk hub fits a wider supply-chain redesign
Pepco had already framed the Gdańsk-area facility as part of a longer supply-chain transformation. In June, the company said the Barniewice site near Gdańsk would add an initial 35,000 square metres of logistics capacity, become Pepco’s sixth distribution centre, support hundreds of Polish stores, and increase direct-to-store deliveries.
The location was selected for access to the ports of Gdańsk and Gdynia, along with road links for domestic and intermodal flows. Pepco said the fully completed site would provide more than 51,000 square metres of space and use the Blue Yonder warehouse management system to support standardized processes.
The hub also fits Pepco’s stated plan for a two-speed supply chain. The company’s strategic framework says it is working toward two new deconsolidation centres by FY28, alongside new distribution centres intended to reduce lead times and improve inventory allocation.
Pepco’s broader logistics buildout is not limited to Poland. The company expanded its partnership with DHL Supply Chain in 2026, with DHL managing five strategic Pepco distribution hubs across Europe. Pepco said the partnership covered 290,000 square metres of warehouse operations and served 4,020 Pepco stores across Europe.
The broader signal for retailers
Pepco’s case is useful because it turns a general supply-chain warning into operating choices. The company is changing where inventory decisions happen, how freight capacity is contracted, and how shipment visibility supports store allocation.
Not every retailer needs a port-adjacent deconsolidation site. The smaller lesson is that unreliable freight should be measured and managed at the workflow level. Retailers need to know which routes are slipping, which products require earlier commitments, which goods can be redirected late, and which costs can be absorbed before price changes reach customers.
For ecommerce operators and store-based retailers alike, the risk is treating freight reliability as a background issue until stock arrives late. Pepco’s response points to a different model: build systems that assume the schedule will move, then keep enough control to make better decisions when it does.
What comes next
Pepco’s official calendar lists a full-year pre-close trading update for September 29, 2026, followed by FY26 preliminary results on December 9, 2026. Those updates may offer more detail on whether the company’s logistics changes are protecting availability, margins, and expansion plans as shipping disruption continues.
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