In the face of adversity related to ongoing risk south of the Suez Canal, a trade lane ordinarily used for shipping about 15% of global ocean cargo between Europe and Asia, shippers and supply chain professionals remain resilient.
A series of interviews by Bloomberg with retail executives and at least one ocean operator have revealed that industry representatives are managing to absorb the impact of rebel attacks around the Horn of Africa that have disrupted as much as 60% of vessel traffic through Suez.
Reza Taleghani, CEO of luxury luggage manufacturer Samsonite, said: “If you think about things you read about in the news, shipping delays, Red Sea, et cetera, we are just fine.
“We have inventory exactly where we need it to be. All of our facilities, even if there is a week or two delay, (it’s ) not that big a deal.”
Not everyone, though, is unconcerned.
Bjorn Gulden, CEO of footwear brand Adidas, said: “We have a little bit of headwind in freight in the first half because of the Red Sea situation and, as you know, if the freight companies have a chance to do something, they increase prices.”
He added, though, that expectations were for the situation south of the Suez to normalise.
“Then the rest of everything that has to do with margin is going in the right direction.”
According to Laura Alber, CEO of high-quality merchandise retailer Williams-Sonoma, the situation in the Red Sea is “pretty terrible”.
“However, it is not costing us any more money. So far it is costing us about 10 days of delivery, give or take.”
Through communicating developments to their customers, disappointment about delayed deliveries had also been avoided, Alber said.
Multinaitonal ports operator DP World also added to the impression that there was a lot of robust wherewithal in industry.
Its group chairman, Sultan Ahmed bin Sulayem, said: “Despite the uncertain start to 2024 with the ongoing Red Sea crisis, our portfolio has continued to demonstrate resilience.”
He stressed, though, that “the outlook remains uncertain due to the challenging geopolitical and economic environment”.
