Red Sea Crisis Disrupts Ikea, Abercrombie & Fitch Shipments

(Bloomberg) -- Ikea faces possible shortages of some products as shipping firms reroute vessels away from the Red Sea, while clothing retailer Abercrombie & Fitch Co. plans to shift to air freight to avoid snags.

Swedish flatpack furniture giant Ikea said it’s looking for other options to secure the availability of its products, many of which normally pass through the Red Sea and the Suez Canal on their way from factories in Asia to Europe and other markets.

Global shipping companies including A.P. Moller-Maersk A/S and Hapag-Lloyd AG have diverted cargoes after Iran-backed Houthi militants intensified attacks on commercial vessels navigating the Red Sea. The attacks, linked to the Israel-Hamas war, have created another shipping emergency more than two years after a vessel stuck in the Suez Canal snarled global trade.

Ohio-based Abercrombie aims to swap sea freight for air wherever possible to avoid disruptions, according to an email to suppliers seen by Bloomberg News. 

The Red Sea shipping lanes to the Suez Canal are important to its operations because all of its freight from India, Sri Lanka and Bangladesh follows that route to reach the US, it said.

Abercrombie & Fitch representatives didn’t respond to phone calls and emails seeking comment.

As ships hauling everything from oil to grains to autos are forced to sail around Africa, the extra costs and delays pose risks to the global economy, just as inflation looked set to cool.

“The situation in the Suez Canal will result in delays and may cause availability constraints for certain Ikea products,” Oscar Ljunggren, a spokesperson for Inter Ikea Group, said in response to emailed questions.

Ikea remains in close dialogue with transportation providers “to ensure the safety of people working in the Ikea value chain and to take all the necessary precautions to keep them safe,” he said.

Ikea doesn’t own container vessels, and the company’s transportation partners manage all its shipments, Ljunggren said. The company declined to disclose details on shipments or products that are moved through the Suez Canal, citing safety and competitive reasons.

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