Companies From IKEA to Caterpillar Hit by Suez Blockage in Growing Trade Crisis
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Swedish furniture giant Ikea and yellow bulldozer-maker Caterpillar Inc. typify the supply-chain headaches facing international companies due to the massive container ship blocking the Suez Canal.
Ikea said it’s considering all options to ensure availability of products such as flatpack beds and couches, while Caterpillar is said to be considering airlifting products if necessary. Seabay International Freight Forwarding Ltd., a company that handles Chinese goods sold on platforms such as Amazon.com Inc., has 20 to 30 containers on the ships waiting to cross the blocked canal, according to owner Mark Ma.
“If it can’t be resumed in a week, it will be horrible,” said Ma. “We will see freight fares spike again. The products are delayed, containers can’t return to China and we can’t deliver more goods.”
The challenges for international companies are only likely to worsen with efforts to dislodge the Ever Given vessel seen taking at least another five days, people familiar with the matter said Friday, increasing the likelihood of further disruption of the flow of everything from oil to grain and cars.
The crisis comes as companies were already battling the strain of adapting supply chains to cope with a pandemic-related e-commerce boom, while Covid-19 regulations at ports are slowing the passage of some products.
P&F Industries Inc., a U.S. maker of pneumatic hand tools, said the Suez shutdown only exacerbates delays to trade that have caused the firm to add six to eight weeks to expected delivery times.
When they arrive in the U.S., “shipments are going to sit there for quite a period of time, days, a week, even two weeks before customs and everything else lets you go,” Chief Executive Officer Richard A. Horowitz told analysts this week. “That’s something that’s going on with us for several months now.”
While A.P. Moller-Maersk A/S and Hapag-Lloyd AG are considering sending ships around Africa to avoid the gridlock, Seabay’s Ma said detouring ships may not be a viable solution, due to risks taking unfamiliar routes and extended shipment times.
“What if the canal got cleared in eight to ten days? You lose even more time,” he said.
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