Ikea on Alert: Houthi Attacks on the Red Sea Threaten Global Supply Chains

Containers worth 80 billion dollars wander in the Red Sea, household appliances and Ikea furniture trapped

by Sededin Dedovic
Ikea on Alert: Houthi Attacks on the Red Sea Threaten Global Supply Chains
© Peter Macdiarmid / Getty Images

An army attacking ships along the Red Sea's main shipping route could cause supply shortages for many companies, including Ikea, the Swedish furniture maker has warned. In a recent warning, Swedish furniture giant Ikea highlighted potential supply chain disruptions caused by ongoing attacks on ships along the Red Sea's primary shipping route.

Rebels in Yemen, backed by Iran, have stepped up their attacks on ships in the strategic Suez Canal, prompting major shipping companies such as MSC, Maersk, Hapag-Lloyd and CMA CGM to suspend shipping containers through the area.

Ikea, a global player in the furniture industry, has expressed concern about possible delays and shortages of certain products as it looks for alternative routes for its cargo ships. A company spokesperson emphasized the priority of ensuring the safety of workers in the supply chain and mentioned the ongoing evaluation of alternative options.

Ikea, which relies on external container operators, foresees challenges due to escalating unrest in the Suez Canal.

80 billion dollars worth of cargo

The impact is not limited to Ikea, as the disruptions have led to at least $80 billion worth of cargo being diverted from the Suez Canal, a vital passageway between Europe and Asia.

Electroluk, the world's largest home appliance manufacturer based in Sweden, has established a task force to explore alternative routes and prioritize deliveries in response to the crisis. Shipping giants such as Maersk, Hapag-Lloyd and CMA CGM have confirmed their decision to divert ships already in transit to the Cape of Good Hope route along southern Africa.

Maersk CEO Vincent Clerc expressed concern about the unacceptable risk to employees, citing uncertainty about which ships could become targets in the current volatile situation. Global trade is constantly changing, companies are being reminded of the importance of flexible supply chain strategies.

We have to point out that so far the companies have been largely resilient, adapting to the challenges in the search for uninterrupted trade.