The delinquency of a giant container ship in the Suez Canal in Egypt is not only hampering the navigation movement in the canal, but it may go beyond its scope to put more obstacles and difficulties on European and American retailers regarding the provision of products during the Coronavirus pandemic.
The ship crisis, which began on Tuesday and may last for weeks, is the latest crisis in global supply operations, which witnessed a major transformation when the closures caused by the Corona pandemic prompted consumers who had to stay in their homes to update everything related to the basis and devices in those homes.
IKEA, the world’s largest furniture maker, and London-based Discon Carvon for electrical appliances said they were among the retailers with goods on board the delinquent ship.
The Amsterdam-based home appliance company, Bloker, confirmed that it was facing delays in the arrival of its goods, but did not provide any details.
The company, which is overseeing the rescue efforts, added that it could take weeks to re-float the Evergiven, which ran aground in the canal during a sandstorm.
The increase in imports to Europe and the United States due to the pandemic has stopped empty containers in the wrong areas completely, raised the cost of shipping and caused bottlenecks in sea ports, which affects the transport sector and threatens to worsen.
“Ships, containers and goods are all in the wrong places,” said Douglas Kent, Executive Vice President of the Association for Supply Chain Management (ASCM).
The “Lloyd’s List” newspaper, which specializes in shipping matters, estimates that about 9.6 billion dollars of containerized goods pass through the Suez Canal every day. Experts said that thousands of empty containers were returned to Asian factories via the canal.
Ikea furniture has about 110 containers on the delinquent ship in the Suez Canal and is investigating the number of product boxes on other ships waiting to enter the canal.
“Depending on how this business continues (resurfacing the vessel) and the time it takes to finish the process, it may lead to restrictions on our supply chain,” said Hans Maard, spokesperson for the IKEA brand and the franchisor, Inter IKEA.
“This is a devastating event in an already fraught market, where high demand caused delays that prevented imported goods from reaching store shelves in time,” said Richard Roche, head of the subcommittee at the National Customs and Freight Forwarder Companies.
The problems related to shipping containers are exacerbated in Europe, where major ports such as Antwerp in Belgium and Felixsto in Britain are suffering from congestion. But the United States is open to the east and the coast of the Gulf, and experts say that about 45 percent of the volume of cargo in the ports of New York and New Jersey in the United States passes through the Suez Canal.
There was no immediate comment from Walmart, which uses seaports in the southeast and other parts of the country, or from its online competitor, Amazon.
US companies such as Nike and Peloton grabbed the headlines in claiming millions of dollars in cost related to shipping delays and disruption of product delivery. Payments, as part of a relief package approved by President Joe Biden to stimulate the economy, to help counter the repercussions of Corona, worth $ 1.9 trillion, are expected to boost consumer demand and intensify such pressures.
In a matter of days, a race to redirect goods could begin, putting retailers in competition with other industries for exorbitant shipping places.
Oliver Chapman, UK partner in procurement in the supply chain (OCI), confirmed that 134 containers of PPE equipment, including gloves and masks, are scheduled to eventually be sent to organizations such as the National Health Service in England and Northwell Health in New York are on board Nine ships stuck behind an Evergreen.
He added that alternative rail service from Asia to Europe was already crowded and air freight was very expensive. His group is already redirecting some US cargoes to the port of Los Angeles, which is beset by a flood of goods.
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