The stranded ship container blocking the Suez Canal threatens to make it even more difficult for European and U.S. retailers to keep products in stock during the coronavirus pandemic.
The Suez Canal crisis is the latest crisis to strike the global supply chain that was upended when coronavirus shutdowns spurred house-bound consumers to upgrade appliances, sofas, televisions and backyards.
IKEA, the world’s largest furniture seller, and London-based electronics seller Dixons Carphone are among the retailers with goods on the stranded vessel.
Amsterdam-based household goods seller Blokker confirmed they have goods that are being delayed.
The salvage company overseeing the rescue effort has warned it could take weeks to dislodge the massive Ever Given, which got wedged in the canal during a sand storm.
The resulting surge in imports due to the pandemic to Europe and the United States stranded empty containers in the wrong places, drove up cargo rates and caused seaport bottlenecks that are rippling throughout the transportation sector and threatening to get worse.
“Ships, containers and goods are all in the wrong places,” said Douglas Kent, an executive vice at the Association for Supply Chain Management (ASCM).
Lloyd’s List estimates that roughly $9.6 billion in containerized goods, including exercise equipment, appliances, apparel to consumer electronics, pass through the Suez Canal each day. Thousands of empty containers are also returned to Asian factories via the canal, experts said.
IKEA has about 110 containers on the ship wedged in the canal and is investigating how many boxes of products are on other vessels waiting to enter the channel.
“Depending on how this work proceeds and how long it takes to finish the operation, it may create constraints on our supply chain,” said Hannes Mård, spokesman for IKEA brand owner and franchiser Inter IKEA.
The risk to container shipping is greatest in Europe, where key seaports like Antwerp in Belgium and Felixstowe in Britain are grappling with backlogs. The United States is exposed on the East and Gulf Coasts. About 45% cargo volume at the Port of New York & New Jersey moves through the Suez Canal, experts said.