Current:Home > ScamsIkea warns of product delays and shortages as Red Sea attacks disrupt shipments-DB Wealth Institute B2 Expert Reviews
Ikea warns of product delays and shortages as Red Sea attacks disrupt shipments
View Date:2024-12-25 03:52:37
Ikea is warning of possible shortages of some of its products as shipping companies bypass the Red Sea, one of the world's busiest trade routes, because of mounting security threats in the region.
A number of major container carriers are diverting shipments from a key waterway that leads to the Suez Canal because of a series of attacks on vessels by Houthi militants from their bases in Yemen, data from freight shipping platform Freightos shows. The Iran-backed Houthis vowed last month to strike ships it suspects of having Israeli ties in a show of support for Hamas, the Gaza-based militia that has been at war with Israel since its Oct. 7 attack on the country.
"The situation in the Suez Canal will result in delays and may cause availability constraints for certain IKEA products," the Swedish furniture retailer's parent company, Inter IKEA Group, told CBS MoneyWatch on Thursday.
The company said it is evaluating its options to ensure the availability of its products. Ikea does not own any container vessels, and its transportation partners manage all the company's shipments, an Inter IKEA Group representative noted.
More than 20 vessels have come under attack in the Red Sea since mid-November, according to Zev Faintuch, a senior intelligence analyst at global security firm Global Guardian. As a result, 19% of freight is now being diverted from the Suez Canal, the shortest trade route between Europe and Asia, according to the Freights Baltic Index.
In recent weeks, shipping giants including CMA CGA, Equinor, Evergreen, Hapag-Lloyd, Maersk, Orient Overseas and ZIM have all said they plan to avoid the Red Sea while the violence persists, and energy company BP said Monday it has suspended gas and oil shipments in the area.
Before the recent flurry of attacks in the region, 12% of global trade passed through the Suez Canal, according to the U.S. Naval Institute.
The diverted shipments will now pass through an alternative route along Africa's southern tip, adding days or weeks to shippers' journeys. Shipping costs have jumped 14% since freight carriers moved to reroute around the Suez Canal because of the heightened risk of attacks, according to Freightos data.
"The impact of the trade diversions will be quite dramatic…[resulting in] longer lead times and higher costs until security is restored," Freightos Chief Marketing Officer Eytan Buchman told CBS MoneyWatch.
Other retailers are also acting to protect their supply chains amid the threat to ships in the Red Sea. For example, clothing retailer Abercrombie & Fitch Co. is planning to shift to air freight to secure its supplies and avoid delays, Bloomberg reported on Thursday.
Meanwhile, efforts to improve security in the region are underway. The U.S. is forming a 10-nation coalition to quell Houthi attacks in the Red Sea, U.S. Secretary of Defense Lloyd J. Austin III said Monday in a statement.
- In:
- War
- Ikea
- Red Sea
- Houthi Movement
- Hamas
- Israel
Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News' BizTech Unit and worked on the Associated Press' web scraping team.
veryGood! (1794)
Related
- Timothée Chalamet Details How He Transformed Into Bob Dylan for Movie
- Jordan Love’s strong 1st season as Packers QB ends with disappointing playoff loss
- An explosive case of police violence in the Paris suburbs ends with the conviction of 3 officers
- Owning cryptocurrency is like buying a Beanie Baby, Coinbase lawyer argues
- Beyoncé nominated for album of the year at Grammys — again. Will she finally win?
- As Houthi attacks on ships escalate, experts look to COVID supply chain lessons
- Jordan Love’s strong 1st season as Packers QB ends with disappointing playoff loss
- Small plane makes emergency landing on snowy Virginia highway
- 'Dangerous and unsanitary' conditions at Georgia jail violate Constitution, feds say
- David Oyelowo talks MLK, Role Play, and how to impress an old crush
Ranking
- Bears fire offensive coordinator Shane Waldron amid stretch of 23 drives without a TD
- Does Teen Mom's Kailyn Lowry Want More Kids After Welcoming Baby No. 6 and 7? She Says...
- Hey Now, These Lizzie McGuire Secrets Are What Dreams Are Made Of
- Endangered Whale ‘Likely to Die’ After Suspected Vessel Strike. Proposed NOAA Rules Could Prevent Future Collisions, Scientists Say
- Drone footage captures scope of damage, destruction from deadly Louisville explosion
- South African government says it wants to prevent an auction of historic Mandela artifacts
- Brutally cold weather expected to hit storm-battered South and Northeast US this weekend
- S&P 500 notches first record high in two years in tech-driven run
Recommendation
-
Mean Girls’ Lacey Chabert Details “Full Circle” Reunion With Lindsay Lohan and Amanda Seyfried
-
Murder charge is dropped against a 15-year-old for a high school football game shooting
-
Air pollution and politics pose cross-border challenges in South Asia
-
Texas man pleads guilty to kidnapping teen whose ‘Help Me!’ sign led to Southern California rescue
-
Michael Grimm, former House member convicted of tax fraud, is paralyzed in fall from horse
-
Sports Illustrated to undergo massive layoffs after licensing agreement is revoked
-
Andrew Cuomo sues attorney general for records in sexual harassment probe that led to his downfall
-
Florida under NCAA investigation year after failed NIL deal with QB signee Jaden Rashada
Like
- Jessica Simpson’s Sister Ashlee Simpson Addresses Eric Johnson Breakup Speculation
- Documents say Fulton County DA Fani Willis was booked on flights bought by prosecutor with whom she's accused of having affair
- Alabama plans to carry out first nitrogen gas execution. How will it work and what are the risks?