Suez Canal blockage may cause supply chain issues: Ikea
Container Ever Given ship remains lodged in Suez Canal after a dust storm beached it on Tuesday. International companies are speaking out about how they may be affected due to this blockage.
The Swedish furniture company, Ikea, operating in at least 41 countries, at present has over 100 containers with products atop the stranded ship, according to Swedish daily newspaper Svenska Dagbladet. According to a spokesperson on CNN, the company said that if the blockage continues, it could create constraints on their supply chain.
Containers filled with IKEA products on board ships blocked at the Suez Canal could “create constraints on our supply chain,” if delays persist, an IKEA spokesperson told CNN.
— Ana Cabrera (@AnaCabrera) March 26, 2021
Apart from Ikea, another international company like Caterpillar is also facing headaches from the canal crisis, the construction machinery company is considering airlifting products if necessary to bypass the ongoing blockage, according to Bloomberg.
If the blockage drags on essentials like coffee, toilet paper, seafood, and a host of other goods and supplies could also fall into short supply. The Suez Canal Authority said Saturday it hopes to float the ship soon.
According to an estimate from Lloyd’s List, the blockage at Suez may cost approximately $400 million per hour in delayed goods. The canal has been blocked for over 72 hours, costing companies approximately $29 billion.
The Suez Canal is one of the world’s most important and most traveled shipping routes. It has about 12% of global trade passing through it every year.
On Thursday, commodity experts said forcing ships to travel around the tip of Africa is “unlikely” due to the shipping delays that it may cause, but that may change if the blockage extends for weeks.
Ever Given ship leased by Evergreen company, appears to have already diverted course on several of its ships in the previous days to take the long Africa-based route, despite the extra costs. According to Wall Street Journal reports, the journey may add $450,000 in costs to the journey by adding weeks to the estimated travel time.
