The Strategist

IKEA warns of supply disruptions due to Red Sea attacks

12/22/2023 - 02:35

Furniture maker IKEA issued a warning about potential delays to its supply chain and unavailability of certain products in shops as a result of logistical issues brought on by attacks on ships in the Red Sea.

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According to the company’s representative quoted by the BBC, the situation in the Red Sea "will lead to delays in deliveries and may worsen the availability of some IKEA products."

Yemeni Houthis have started using drones and rockets to attack ships in the Red Sea since late October; in recent weeks, the frequency of these attacks has grown. Transportation corporations have started to direct ships to pass via the southern tip of Africa, the Cape of Good Hope, for security reasons.

Such a route would add around 7,500 kilometers, or 8 to 9 days, to the travel time from Taiwan to the Netherlands, according to research company Project 44. Xeneta experts project that the route would cost approximately $1 million more.

Since the items are already in the nation, there won't be a shortage in British stores during the Christmas season, but there may be unfavorable effects in early 2024, according to Andrew Opie of the British Retail Consortium (BRC).