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Factbox-How companies are responding to attacks on ships in the Red Sea

by Jessica Weisman-Pitts
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2023 12 20T144611Z 1 LYNXMPEJBJ0H4 RTROPTP 4 ISRAEL PALESTINIANS SHIPPING COMPANIES 1

Factbox-How companies are responding to attacks on ships in the Red Sea

(Reuters) -Attacks on vessels by Iranian-backed Houthi militants in Yemen have disrupted international commerce on the shortest shipping route between Europe and Asia.

The attacks, targeting a route that accounts for about 15% of the world’s shipping traffic, have pushed several shipping companies to reroute their vessels.

Below are companies’ responses to the disturbances (in alphabetical order):

AB FOODS

The Primark-owner is monitoring the situation, but its supply chains are capable of some adjustment, a spokesperson said, adding that so far it saw no need to be concerned.

BP

The oil major on Dec. 18 said it had temporarily paused all transits through the Red Sea.

DANONE

The French food group said in December that most of its shipments had been diverted, increasing transit times. Should the situation last beyond 2-3 months, Danone will activate mitigation plans, including using alternate routes via sea or road wherever possible, a spokesperson said.

DHL

The German logistic company, which does not operate ships but uses them to transport containers, on Jan. 8 advised its customers to take a close look at how they manage inventories.

ELECTROLUX

The Swedish home appliance maker has set up a task force to find alternative routes or identify priority deliveries to try to avoid disruptions. It sees a limited impact on deliveries for now.

EQUINOR

The Norwegian oil and gas firm on Dec. 18 said it had rerouted vessels that had been heading towards the Red Sea.

ESSITY

The maker of brands such as Libresse and TENA said it was staying in contact with impacted suppliers to ensure continued flow of goods, but added the impact on its business was limited due to the low number of supplies moving via the Suez Canal.

EUROPRIS

The Norwegian retailer, which imports 35-40% of goods sold from Asia via sea freight, on Jan. 5 said it had not considered other shipping options as this would increase costs. It said longer shipping times were within its safety margin and no significant challenges were expected.

GEELY

Geely, China’s second-largest automaker by sales, said on Dec. 22 its EV sales would likely be impacted by a delay in deliveries, as most shipping firms it uses to export EVs to Europe sail around the Cape of Good Hope.

IKEA

The Swedish ready-to-assemble furniture retailer on Dec. 19 said the situation would result in delays and may cause availability constraints for certain products. “We are evaluating other supply options to secure the availability of our products,” it said.

KONE

The Finnish elevator maker said the situation may in some cases delay shipments by 2-3 weeks, but most of its customer deliveries should stay on schedule. Kone said it had prepared for the disruptions by seeking alternative delivery methods and routes.

LIDL

Lidl unit Tailwind Shipping Lines, which transports non-food goods for the discount supermarket chain and goods for third-party customers, said it was sailing around Africa for now.

MOSAIC

The U.S. fertilizer company said on Dec. 18 it had rerouted a couple of U.S.-bound shipments around Africa.

NEXT

The British clothing retailer’s CEO on Jan. 4 said sales growth would likely be moderated if disruptions continued through 2024. He said Next, which sources the majority of its products from Asia, could mitigate this through earlier ordering or using some air freight.

SAINSBURY’S

Britain’s second largest grocer said on Jan. 10 it was in regular contact with the UK government about the Red Sea disruptions.

“We’re making sure that we plan the sequencing of product from Asia Pacific so that we get products in the right order,” CEO Simon Roberts said, noting that long term contracts with shippers “mitigate any cost impact as far as possible”.

TSMC,

The world’s top contract chipmaker said on Dec. 19 it did not anticipate a significant impact on its operations.

VOLKSWAGEN

The German carmaker on Dec. 20 said rerouting of shipments would result in around two weeks longer journeys, but it had not seen any problems so far.

VOLVO CAR

The Swedish automaker said it was affected by the disruptions and was investigating their potential impact, but saw no impact on its ability to reach global wholesale and production targets.

WHIRLPOOL

The appliances maker said in December it was closely monitoring logistics issues in the region to help mitigate risks as they arise, adding there was no impact to its business so far.

YARA

The Norwegian fertilizer maker told Reuters it was only mildly impacted for now, though the Red Sea is an important supply route for the company.

(Compiled by Izabela Niemiec and Paolo Laudani in Gdansk; editing by Ed Osmond and Milla Nissi)