((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Updated by Michelin and QatarEnergy, added by Bid Corporation)
Businesses are responding to shipping disruptions on the shortest route between Europe and Asia.
Attacks in the Red Sea region by Houthi militants in Yemen have prompted several shipping companies to reroute ships.
Below are details on how businesses in different industries are responding:
CARS
** GEELY 0175.HK: China’s second-largest automaker by sales said on Dec. 22 that its electric vehicle (EV) sales would likely be affected by a delay in deliveries.
** MICHELIN MICP.PA: The French tire maker said on February 12 that logistical problems linked to the Red Sea crisis were weighing on its flows of finished products, mainly natural rubber, but that it would have a “reasonably marginal” on the 2024 results.
** SUZUKI 7269.T: its Hungarian production plant restarted manufacturing on January 22 as planned after a shutdown since January 15 due to delays in the arrival of engines manufactured in Japan.
** TESLA TSLA.O: The US EV maker will suspend most car production at its factory near Berlin from January 29 to February 11 due to a shortage of components caused by changes in transport routes.
** VOLVO CAR VOLCARb.ST: The Swedish carmaker said on January 12 that it would halt production at its Belgian plant for three days due to delays.
ENERGY
** BP BP.L: On December 18, the oil company said it had temporarily halted all transits across the Red Sea.
** EQUINOR EQNR.OL: On December 18, the company said it had diverted ships heading to the Red Sea.
** EDISON EDNn.MI: the general director of the energy group declared on January 25 that it was starting to experience a slowdown in deliveries of liquefied natural gas (LNG) from Qatar.
** QATARENERGY: Shipping disruptions will impact QatarEnergy’s liquefied natural gas deliveries, but not its production, its chief executive said on February 12.
The company, one of the world’s largest LNG exporters, had stopped shipping via the Red Sea due to security concerns, a high-level source with direct knowledge of the matter told Reuters on January 15 .
** SHELL SHEL.L: The British oil company has suspended all shipments via the Red Sea for an indefinite period, the Wall Street Journal reported on January 16. Shell declined to comment.
Its chief financial officer said on Feb. 1 that it was making day-to-day decisions on Red Sea shipments.
** TOTALENERGIES TTEF.PA: The French energy and oil company said on February 7 that it had not sent ships to the region for several weeks. Its chief executive said Red Sea crossing costs had increased, partly because of rising insurance costs.
** VALERO ENERGY VLO.N: The US refiner said on January 25 that attacks in the Red Sea led to higher freight rates for crude oil.
LOGISTICS
** DHL DHLn.DE: The German logistics company, which does not operate ships but uses them to transport containers, on January 8 advised its customers to take a close look at how they manage their inventory.
** FEDEX FDX.N: The US package delivery giant said on January 14 that it had not seen a significant change in air freight due to disruptions in the Red Sea.
RETAILERS
** ADIDAS ADSGn.DE: The chief executive said on February 1 that shipping disruptions in the Red Sea were negative for gross margins, adding that exploding freight rates were leading to higher costs and shipping delays. shipping were causing delivery problems.
** DANONE DANO.PA: The French food group said in December that most of its shipments had been diverted, increasing transit times. If the situation were to last more than 2-3 months, Danone would implement mitigation plans, including the use of alternative routes, its spokesperson said.
** IKEA: The furniture retailer is sticking to planned price cuts despite rising costs, and has sufficient inventory to absorb supply chain shocks, it said Jan. 15.
** MARKS & SPENCER MKS.L: The British retailer’s chief executive said on January 11 that the company expected a slight delay in deliveries of clothing and home products due to disruptions in shipping.
** NEXT NXT.L: The chief executive of the British clothing retailer said on January 4 that sales growth would likely be moderate if disruptions continue into 2024.
** PEPCO PCOP.WA: The owner of Poundland warned on January 18 that its supply could be affected in the coming months if disruptions continue.
** PRIMARK: The financial director of Associated British Foods
ABF.L said on January 23 that Primark was coping with the disruption by adjusting schedules and stock flows.
** SAINSBURY’S SBRY.L: “We make sure to plan the sequencing of products coming from Asia-Pacific so that we receive them in the right order,” the company’s chief executive said, adding that long-term contracts with shippers “mitigate the cost impact as much as possible.”
** TARGET TGT.N: The American distributor is experiencing some disruptions in its shipments from India and Pakistan, a source familiar with the matter said on January 12, calling the effect “minor” in the together.
** TRACTOR SUPPLY TSCO.O: Deliveries for the U.S. distributor were delayed by two to more than 20 days, the company’s supply chain chief said Jan. 12.
** WILLIAMS-SONOMA WSM.N: The Pottery Barn owner is rerouting shipments and has been working on contingency plans, the chief executive told CNBC on Jan. 24.
OTHERS
** AKZO NOBEL AKZO.AS: The financial director of the Dutch paints and coatings manufacturer said on February 7 that lengthening supply lines and increasing costs could have an impact on the company, which sourcing raw materials from China.
“For us, this is a working capital impact, but it is manageable,” he added.
** BHP GROUP BHX.AX: The Australian mining giant said on January 25 that the disruptions were forcing some of its freight service providers to take alternative routes, such as the Cape of Good Hope in Africa.
** BID CORPORATION BIDJ.J: The South African foodservice company is stocking buffer stocks to help compensate for shipping delays, its chief executive said on February 21.
** ELECTROLUX ELUXb.ST: The Swedish appliance manufacturer has set up a task force to find alternative routes or identify priority deliveries to try to avoid disruption.
On February 2, its director general said at the address that the costs associated with the developing situation in the Red Sea were manageable. “If the situation continues, I am more concerned about the increase in costs than the risk of having to interrupt production,” he added.
**ESSITY ESSITYa.ST: The maker of brands including Libresse and TENA said it remains in contact with affected suppliers to ensure a continued flow of goods. On January 25, its chief executive told the address that he saw a negative impact on its transport costs, but he could not specify how much that impact would be.
** EVONIK EVKn.DE: The specialty chemicals maker told the address that it was affected by “short-term route changes and delays” and was trying to mitigate the impact by ordering earlier and opting for air freight wherever possible.
** GECHEM GMBH & CO KG: The German chemical maker said it had reduced its production of dishwasher and toilet tablets due to delays.
** KONE KNEBV.HE: The Finnish elevator maker said the situation could in some cases delay shipments, but most deliveries to its customers are expected to remain on time. Kone said it prepared for these disruptions by researching alternative delivery methods and routes.
** LEVI STRAUSS & CO LEVI.N: The denim manufacturer is experiencing delays of 10 to 14 days in delivery times due to continued disruptions to shipping in the Red Sea. He moved some American shipping to the West Coast, avoiding the Red Sea and the Suez Canal.
** LOGITECH LOGN.S: The computer peripherals maker’s chief executive said on Jan. 23 that profit margins would be hit by rising transportation costs due to the Red Sea crisis.