Giants have announced: suspend production!
Release date: [2024/1/22]  Read total of [83] times

According to today's Russian website reported on the 20th, the well-known maritime consulting agency Sea-Intelligence recently said that the current disruption of the Red Sea route has caused greater damage to the global supply chain than in the early days of the new coronavirus outbreak.


A report by Sea-Intelligence said the current decline in ship capacity was the second largest in recent years. More consequential was the six-day "blockage of the century" in the Suez Canal caused by the grounding of the very large cargo ship "Long Bounty," which brought trade to a standstill at a cost of $9 billion a day.


Sea-Intelligence estimates that about 10% of the world's fleet is currently idle. The report said that if sea carriers deployed additional vessels, it could be used to offset the current delays.


Giants have announced: suspend production!


So far, some companies have claimed that container ship delays have hit their supply chains. Tesla, Volvo and Michelin recently said they had been forced to suspend production at some of their factories. Global home furnishing giant IKEA says it may experience delivery delays for some of its products.


It is worth noting that recently, a number of auto factories have stopped production due to parts transportation problems. Japan's Suzuki Motor Co. will suspend production at its only European plant in Hungary for a week. Earlier, Tesla announced that it would suspend most car production at its plant near Berlin from Jan. 29 to Feb. 11, while Volvo Cars announced last week that its plant in Ghent, Belgium, would suspend production for three days.


Many of the above well-known car companies stopped production at European factories because of delays caused by shipping companies carrying spare parts to avoid the Red Sea around the Cape of Good Hope in South Africa. To avoid a shutdown, Volkswagen has rerouted parts from the Suez Canal to the Cape of Good Hope starting last month, adding two weeks to delivery times.


The trade in auto parts between Asia and Europe is no small matter. At present, about 70 percent of the parts of the European automotive industry are transported from Asia via the Red Sea.


Global furniture giant IKEA has warned of possible delivery delays for some of its products as a result of Houthi attacks on ships heading to the Suez Canal. "The situation in the Suez Canal will cause delays and may lead to limited availability of certain IKEA products." The company said it was in dialogue with transport suppliers to ensure shipments could be carried out safely.


Ikea also said it is evaluating other supply route options to ensure its products can be delivered to customers. Many of the company's products typically travel through the Red Sea and Suez Canal from factories in Asia to Europe and other markets.


The "Customer Notice on the Situation in the Red Sea and restrictions on Suez Canal Transport" issued by Robyn Freight International shows that the overall impact of the Red Sea conflict on the global supply chain is still ongoing and has already had a clear knock-on effect, predicting that it will take a long time for the logistics market to return to a predictable cycle. The company also said that in order to secure space in a competitive capacity market, shippers are advised to book their space at least three to four weeks in advance.


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