As more cargo ships grapple with escaling attacks at the Suez Canal, led by Iranian-backed Houthi rebels in Yemen, retail industry groups are monitoring the problem and devising possible solutions. The violence is leading some shippers to take precautions and others to avoid the route entirely, boosting the potential for delays and cost increases.
As of Sunday, 77 vessels transited the canal, with a total net tonnage of 4 million tons, and the Suez Canal remains the fastest and shortest route between Asia and Europe, according to a report from the Suez Canal Authority. Between Nov. 19 and Dec. 17, 55 vessels opted to go through the Cape of Good Hope, which can take up to two weeks longer, a low number compared to those that continued through the Suez, per that report.
Members of the National Retail Federation are working with ocean carrier partners to work through the disruption, NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said in a statement.
“Some carriers have announced that they are rerouting sailings around the Cape of Good Hope,” he said. “This should not have any impact on holiday merchandise since we are beyond the peak shipping season when retailers brought in that merchandise.”
The Retail Industry Leaders Association Tuesday welcomed “the Biden administration’s swift response in announcing Operation Prosperity Guardian, a multinational response to recent attacks on vessels in the Red Sea.”
“Global freedom of navigation is paramount to keep retail supply chains moving efficiently,” Jess Dankert, RILA’s vice president of supply chain, said in a statement. “Rerouting ships away from the Suez Canal results in uncertainty and disruption for retailers and other shippers.”
While the trouble at the Suez Canal is not impacting holiday inventory, it could affect supply chains into the new year depending on how long it lasts, Dankert said.
“Retailers are paying close attention to the situation and flexing their highly developed response capabilities to mitigate any disruptions and extra time that will need to be added to shipping schedules due to this developing situation,” she said.