The German Chamber of Commerce and Industry warns of empty warehouses. The rerouting of merchant shipping will result in longer delivery times and higher costs. The first companies are already feeling the effects.
Because of the attacks on shipping in the Red Sea, the German Chamber of Commerce and Industry is warning of bottlenecks in the supply chains. “A large part of European-Asian trade goes through the Red Sea and the Suez Canal, so that important preliminary products for German industry are currently not arriving on time,” said DIHK foreign trade chief Volker Treier.
Longer delivery times and increasing transport costs in the form of higher freight rates as well as increasing insurance costs would begin to have an impact. “The first warehouses are running empty, production disruptions at German companies are becoming visible,” said Treier.
The processes in the ports are also likely to become more complicated because the ships arrive later than planned and containers for export are waiting to be picked up. As the most open economy of the major industrial nations, Germany is particularly dependent on functioning supply chains, said Treier.
The trade association does not see the situation as critical
The Houthis in Yemen repeatedly attack merchant ships in the Red Sea and want to continue to do so even after their military positions have been shelled by the USA and Great Britain. These attacks by the West would not go without “punishment or retaliation,” the militia said.
However, the German trade association does not expect major bottlenecks in retail due to the tense situation in the region. Companies have set up their supply chains more broadly. “This includes different procurement areas, increased warehousing or alternative products for needs,” said Stefan Genth, general manager of the trade association.
In the long term, it can be assumed that “supply routes will be made more stable and appropriate buffers and alternative strategies will be expanded,” Genth continued.
Tesla pauses production
However, the first companies are already feeling the effects of the attacks on merchant ships. The car manufacturer Tesla is temporarily stopping production at its factory in Grünheide, Brandenburg. The company said that because transport routes had shifted, a gap had arisen in the supply chains. “Due to missing components, we are therefore forced to suspend vehicle production in the Gigafactory Berlin-Brandenburg with the exception of a few areas between January 29th and February 11th,” it said in a statement.
Recently, other companies – including the Chinese car manufacturer Geely and the furniture store Ikea – had also warned of delays in deliveries.
Hapag-Lloyd: additional costs million range
Shipping companies are directly feeling the effects of the situation in the Red Sea. According to Hapag-Lloyd, the Houthi attacks on merchant ships caused additional monthly costs in the high double-digit million range. “It influences the entire industry and also ourselves in a significant way,” a company spokesman told the newspapers of the Funke media group.
The ships of Germany’s largest container shipping company have been avoiding the Suez Canal and the Red Sea since December because of rebel attacks. The delays caused by the diversion around the Cape of Good Hope are immense. To the “USA a week longer, Europe up to two weeks longer, Eastern Mediterranean 18 days longer,” said the shipping company spokesman.
Many shipping companies charge extra transport fees because of the long detour.
The Danish shipping company Maersk is hoping that the situation will ease after the American-British bombings. “We hope that these measures and a stronger naval presence will ultimately lead to a reduced threat situation,” said the world’s second largest container shipping company. It is hoped that this will make it possible to cross the Red Sea and use the Suez Canal again.