Blocked Suez Canal could put squeeze on retail supply chain

Blocked Suez Canal could put squeeze on retail supply chain
The Suez Canal blockage has piled up a backlog of ships waiting to pass from the Indian Ocean to the Mediterranean, or vice versa. (Image: Twitter)
// Some goods made in China might be more difficult to get hold of in the UK thanks to the Suez Canal blockage
// This includes furniture, electronics and clothing to be stocked in high street shops up and down the UK
// Ships can divert around the southern tip of Africa, but this could add weeks to a trip

Some goods made in China might be more difficult to get hold of in the UK amid a shipping squeeze which exacerbated by a container ship blocking off the Suez Canal this week.

High demand had already put pressure on international shipping routes as businesses – particularly retailers – prepare for the end of Covid-19 restrictions from next month, even before the Ever Given ran aground in the vital waterway earlier this week.

The blockage has piled up a backlog of ships waiting to pass from the Indian Ocean to the Mediterranean, or vice versa.

The Suez Canal is one of the world’s most important shipping routes, carrying about 10 per cent of all oil and goods which are transported by sea.

This includes furniture, electronics and clothing to be stocked in high street shops up and down the UK.

“Containerised freight is what gets most goods to most shops,” said Joanna Konings, a senior economist and trade expert at banking giant ING.

“So the whole range of things that people see that are imported, could be in these containers.

“All of that is either directly going through the Suez Canal, or it’s a product that competes with a product that’s going through this canal.”

Konings said this could give producers who are closer to the UK the chance to dominate the market, at least for a time.

However, while this could allow them to increase prices, she warned this might not be a wise move.

Initial hopes that excavators and tug boats could get the Ever Given loose quickly seem misplaced, and a company involved in the Suez rescue operation on Thursday spoke of it taking “days to weeks”.

Ocean freight normally plans for a couple of days’ delay on the month-long voyages, but more than a week is beyond normal.

Ships can divert around the southern tip of Africa, but this could add weeks to a trip.

with PA Wires

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