Red Sea Raids Are Causing Delays And Disruptions For Ikea

Ikea said that because of the continued attacks on ships in the Red Sea by Houthi militants, it anticipates delays and perhaps limited availability for specific products.

“The Suez Canal situation will cause delays and may cause availability constraints for certain IKEA products,” Inter IKEA Group, the parent company of the Swedish furniture giant, said in a statement to CNN on Wednesday.

Following attacks on ships in the Red Sea on Tuesday that halted traffic through the vital Suez Canal trade artery, shipping rates throughout the world surged dramatically, and businesses scurried to prevent delays to supplies.

Leading shipping corporations, such as Maersk, were obliged to detour around the Cape of Good Hope in order to avoid the Suez Canal, which is the shortest shipping route between Europe and Asia, due to recent attacks on vessels by the Iran-aligned Yemeni Houthi rebel organization.

Reminiscent of the cargo ship Ever Given becoming aground in the canal in 2021, which prevented numerous other container ships from passing through for six days, are the attacks. Although container transportation costs have increased significantly as a result of the present interruption, they are still substantially lower than peak epidemic levels.

The biggest appliance manufacturer in the world, Electrolux, has formed a task team to look for alternate routes or prioritize deliveries. At the same time, Inter IKEA has issued a warning about possible shortages of some products.

The cost of shipping a container from China to the Mediterranean as of Tuesday was $2,413, up 44% in December as a result of the disruptions, and down from $1,371 earlier in the year, according to Eytan Buchman, chief marketing officer of Freightos, an online platform for international freight booking and payments.

“To ensure the safety of individuals working in the IKEA value chain and to take all necessary precautions to keep them safe, we are in close dialogue with our transportation partners,” the statement continued. “This is our top concern.”

The company stated that it is keeping an eye on the issue and is currently assessing alternative supply routing possibilities to ensure the availability of its products.

Inter IKEA Group further stressed that shipping is handled by “transport partners” and that the company does not own any container ships.

Ikea’s remarks follow those of other significant businesses, such as BP, the world’s largest oil company, and Maersk, the world’s largest shipping company, which announced that they were temporarily stopping operations in the Red Sea due to the Houthi rebels’ ongoing attacks on ships in recent weeks.

Houthi rebels in Yemen, who are supported by Iran, have declared that they are aiming at ships in the Red Sea as retaliation for Israel’s continuous military operation in Gaza. Houthi rebels have attacked twelve distinct commercial and merchant vessels in the Red Sea with at least 100 attacks in the past month.

One of the world’s most significant maritime commerce lines passes through the Red Sea, and at least 44 nations are connected to ships that have been attacked by the Houthi militants.