The holdup — the subject of endless online memes — has had an impact on British and European customers who are being told of delays to orders of everything from window shutters to sex toys produced in Asia. But deeper problems for manufacturing supply chains remain.
Between testing the vessel and clearing the backlog of other ships, it’s not clear when traffic in the arterial global trade route will get back to normal. Ships have already dashed to the Horn of Africa to avoid the uncertainty, adding 10 to 14 days to their journey.
Between the pandemic and Brexit, the blockage marked yet another global trade snarl-up adding to the headaches of British retailers and manufacturers.
“The ongoing situation is directly affecting shipments of all shutter orders that had not already cleared the canal,” wrote British firm Plantation Shutters Ltd in an email to affected customers.
The firm says its “suppliers have said shipping schedules are currently shifted by at least 1 week,” but that this could change as the extent “of delays become[s] clearer with longer wait times probable.”
The uncertainty is being felt through U.K. industry. “After a year of shipping challenges, retailers will not welcome the additional disruption caused by the Suez blockage,” said Andrew Opie, director of food and sustainability at the British Retail Consortium.
While British consumers get most of their food imports from the EU, Opie explained, the Suez blockage “may impact supplies of goods coming from the far East as goods are rerouted via longer routes.”
Bulk ships make up “a lot of the ships waiting at the moment,” said Florian Braun, head of ocean for Europe, the Middle East and Africa at the freight forwarding platform Flexport. These ships move raw materials to manufacturers, Braun said. The exact effects, he said, are not yet fully known.
In the coming days and weeks, the true impact to U.K. supply chains “will become apparent,” said Richard Rumbelow, director of international affairs at the British manufacturing body Make UK.
Some two-thirds of the estimated £42 billion in goods stopped from passing through the Canal were headed from Asia to Europe, Rumbelow said.
Successfully re-floating the ship “will allow a re-start of operations,” he said, but there’s going to be “an ongoing impact for weeks as the backlog of vessels will take time to clear.” Machine parts and finished products are among the delayed cargo, as well as fuel and (in some cases) live animals.
British exporters who ship partly-assembled or finished goods to the Middle East and Asia will also feel the effects of the delay, he said.
“Mid- to long-term issues could materialize,” Rumbelow explained, such as an “increase in insurance and logistics costs affecting shippers/customers.” And it will further hit British container port operations as they grapple with the displacement of shipping containers due to COVID-19 backlogs. This has already seen ships diverted to EU ports and costs climb for retailers and manufacturers who need to bring components and goods across the new U.K.-EU border.
The knock-on effect to supply chains is “complicated by the congestion at many ports in Asia and Europe,” said Chris Rogers, a trade analyst at Panjiva, part of financial analytics firm S&P Global. Ports will need to “rapidly move products onward” so more congestion doesn’t build up.
“Manufacturing and retail inventory patterns already disrupted by the pandemic may also face shortages further down the line,” Rogers added, pointing out the shipping firm Maersk notes the backlog could take months to play out.
Some expect an impact on seasonal products coming to the U.K. from Asia, Rumbelow explains.
“Seasonal summer goods typically arrive in the U.K. at this time of year,” Braun added, “so we might see shortages in seasonal products such as garden furniture.”