Burlington Doubles Down on Ocean Contracts to Battle Rising Freight Costs
Freight costs have been a persistent thorn in the side of retailers across the United States, and Burlington Stores is making it clear that it has no intention of sitting back and absorbing the financial pain. The off-price retail giant is taking a proactive, multi-pronged approach to managing elevated shipping expenses — anchored by a strategic bet on ocean freight contracts and a concerted push to maximize the density of every shipment moving in and out of its network.
According to Greg Shultz, Burlington's Chief Supply Chain Officer, the company is actively increasing the amount of product packed and loaded per container for both inbound and outbound shipments. Combined with a deliberate move toward locking in ocean contracts, Burlington is positioning itself to weather a freight environment that has remained volatile and costly well into the mid-2020s.
Why Freight Costs Are Still a Major Concern for Retailers
The global freight market has been on a turbulent ride since the COVID-19 pandemic upended supply chains worldwide. While rates briefly corrected downward after the historic highs of 2021 and 2022, costs have once again crept upward, driven by geopolitical disruptions, port congestion, capacity constraints, and strong consumer demand in key markets. For a retailer like Burlington — which depends heavily on a fluid and cost-efficient supply chain to maintain its off-price value proposition — any sustained increase in shipping expenses threatens margins and competitive positioning.
Unlike luxury or premium retailers who can pass costs along to consumers more easily, off-price chains operate on razor-thin margins. Efficiency is not optional; it is existential. That reality is precisely what is driving Burlington's leadership to pursue every possible lever available to manage freight spend.
The Ocean Contract Strategy: Predictability Over Spot Market Volatility
One of Burlington's primary moves is securing ocean freight contracts rather than relying on the spot market. This approach offers several distinct advantages in an unpredictable shipping environment.
- Rate stability: Contracted rates provide a predictable cost baseline, allowing Burlington's finance and supply chain teams to plan budgets with greater accuracy over longer time horizons.
- Capacity guarantees: In periods of high demand, spot market shippers can find themselves scrambling for space. Contracted agreements help ensure Burlington secures the vessel capacity it needs, when it needs it.
- Supplier relationships: Building longer-term relationships with ocean carriers can lead to preferential treatment, better service levels, and more collaborative problem-solving when disruptions inevitably arise.
- Hedging against rate spikes: When spot rates surge — as they did dramatically during the pandemic years — contracted shippers are insulated from the worst of the increases, giving companies like Burlington a meaningful cost advantage over competitors still exposed to market volatility.
The risk, of course, is that contracted rates can sometimes end up higher than spot rates when the market softens. However, Burlington's leadership appears willing to trade that potential upside for the more valuable commodity of cost certainty and operational continuity.
Maximizing Cargo Density: Squeezing More Value from Every Container
Alongside its contracting strategy, Burlington is placing a strong emphasis on increasing the amount of product packed and loaded in each shipment — a practice commonly referred to as improving cargo density or load optimization. This initiative applies to both inbound shipments arriving at Burlington's distribution centers and outbound movements within its logistics network.
The logic is straightforward: if you are paying for a container, it makes financial sense to fill it as efficiently as possible. Shipping a half-empty container at the same cost as a full one is effectively doubling your per-unit freight expense. By working with suppliers and internal logistics teams to improve packing standards and load planning, Burlington can spread fixed shipping costs across more units of product — directly reducing the per-item freight burden.
This kind of operational discipline requires close coordination across multiple functions, including merchandising, sourcing, warehousing, and transportation. It also often demands investment in better data systems and forecasting capabilities so that inbound and outbound flows can be synchronized more effectively. For Burlington, this level of supply chain integration appears to be a strategic priority, not merely an afterthought.
What This Means for Burlington's Competitive Position
Burlington's freight management strategy matters beyond the balance sheet. The off-price retail sector is intensely competitive, with rivals like TJX Companies and Ross Stores constantly vying for value-conscious shoppers. Any cost savings Burlington can generate through smarter logistics directly supports its ability to offer compelling prices on brand-name merchandise — which is the core promise of the off-price model.
Moreover, supply chain excellence has become a genuine differentiator in modern retail. Consumers expect products to be available when and where they want them, and retailers that can deliver consistency even in difficult freight environments earn stronger loyalty and better in-stock performance. Burlington's investments in ocean contracts and load optimization are, in that sense, as much about customer experience as they are about cost control.
Broader Lessons for the Retail Industry
Burlington's approach offers a useful blueprint for other retailers grappling with freight headwinds. Rather than reacting passively to market conditions, proactive retailers are locking in contracts, rethinking how they pack and move goods, and treating supply chain strategy as a boardroom-level priority. As freight markets remain unpredictable, the retailers who invest in supply chain sophistication today are likely to be the ones best positioned to protect margins and serve customers tomorrow.
Burlington's bet on ocean contracts and cargo density optimization may not be flashy, but in the unglamorous world of supply chain management, smart and disciplined execution is often the most powerful competitive advantage of all.