Caterpillar Facing Shipment Delays Due to Suez Blockage

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Caterpillar Inc., the U.S.’s largest machinery producer and one of the biggest in the world, is facing shipment delays due to the Suez Canal blockage and is even considering airlifting products if necessary.

The producer of iconic yellow diggers and bulldozers is anticipating a lag of a week or more in shipments from Asia to its facilities in Europe, according to a person familiar with the matter. The company is already contending with delivery delays of up to three weeks as countries around the world reopen, driving extraordinary demand for its products, according to the person.

The massive container ship blocking the Suez Canal has been stuck for three days, forcing vessels to consider costly and time-consuming alternative routes that threaten global trade of everything from commodities to consumer goods. While some vessels are already rerouting around Africa to avoid the logjam, Caterpillar is more likely to send material by air if the delays are severe enough to threaten a factory-line shutdown, the person said.

Caterpillar Facing Shipment Delays Due to Suez Blockage

Caterpillar didn’t immediately return a request for comment.

U.S. machinery factory activity growth slowed in the first week of March after double-digit gains for most of February, reflecting what could be supply-chain challenges across the sector, Bloomberg Intelligence wrote in a March 18 report. In some ways it has been a good problem for Caterpillar as investors are rewarding the company with a surge in shares, which are off to the best start to a year since 2006, climbing more than 23% through Thursday.

©2021 Bloomberg L.P.

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