US companies and stakeholders are warning of higher costs and supply disruptions caused by tensions in the Red Sea, Kallanish learns from an Institute of Supply Management (ISM) report.
Construction sector respondents of the ISM survey note that “transportation impacts of the Suez Canal, due to unrest in the Red Sea, and the issues at the Panama Canal are impacting both costs and schedules for the transport of global goods.”
This tone is echoed by a group of supply chain stakeholders in a US Department of Transportation (DOT) conference call last week.
A common theme was that isolated challenges are beginning to show up, including increased congestion at some US container ports, such as the ports of Los Angeles and Long Beach. This comes as shippers re-route cargo to avoid the Red Sea altogether.
In fact, shipping company Maersk indicates that it would stop sending US flagged vessels through the Red Sea in late January.
Some stakeholders on last week’s DOT call noted they were using their Covid-19 playbook as a template on handling supply chain bottlenecks. They note that it is already helping inform the response to these challenges.
The meeting took place in the context of a comprehensive US government effort to protect freedom of navigation and ensure resilient global supply chains by responding decisively to Houthi rebels’ escalating attacks against commercial vessels.
The US Maritime Administration emphasises its continued commitment to keeping mariners safe and stakeholders up to date.
John Isaacson USA
