Factbox: How companies are responding to attacks on ships in the Red Sea
09/02/2024 12:19
(Adds Akzo Nobel, TotalEnergies)
Feb 9 (Reuters) - Attacks on vessels by Iranian-backed
Houthi militants in Yemen have disrupted international commerce
on the shortest shipping route between Europe and Asia.
The attacks, targeting a route that accounts for about 15%
of the world's shipping traffic, have pushed several shipping
companies to reroute their vessels.
Below are some companies' responses to the disturbances:
AUTOS
** GEELY 0175.HK : China's second-largest automaker by
sales, said on Dec. 22 its electric vehicle (EV) sales would
likely be impacted by a delay in deliveries.
** MICHELIN MICP.PA : four factories in Spain owned by the
French tyre maker halted output on Jan. 20-21 due to raw
materials delivery delays.
** SUZUKI 7269.T : its Hungary production plant restarted
manufacturing on Jan. 22 as planned following a halt since Jan.
15 due to delays in the arrival of Japanese-made engines.
** TESLA TSLA.O : the U.S. EV maker will suspend most car
production at its factory near Berlin from Jan. 29 to Feb. 11
due to a lack of components caused by shifts in transport
routes.
** VOLVO CAR VOLCARb.ST : the Swedish automaker said on
Jan. 12 it would halt production at its Belgian plant for three
days due to delays.
ENERGY
** BP BP.L : the oil major on Dec. 18 said it had
temporarily paused all transits through the Red Sea.
** EQUINOR EQNR.OL : it said on Dec. 18 it had rerouted
vessels that had been heading towards the Red Sea.
** EDISON EDNn.MI : the energy group's CEO said on Jan. 25
it was starting to experience a slowdown in liquefied natural
gas (LNG) supplies from Qatar.
** QATARENERGY: the world's second-largest exporter of LNG
has stopped sending tankers via the Red Sea although production
continues, a senior source with direct knowledge of the matter
told Reuters on Jan. 15.
** SHELL SHEL.L : the British oil major suspended all
shipments through the Red Sea indefinitely, the Wall Street
Journal reported on Jan. 16. Shell declined to comment.
Its CFO said on Feb. 1 he was making day to day decisions on
shipping through the Red Sea.
** TOTALENERGIES TTEF.PA : the French energy and petroleum
company said on Feb. 7 it has not sent ships through the area
for several weeks. Its CEO said the costs of going through the
Red Sea have gone up, partly due to higher insurance costs.
** VALERO ENERGY VLO.N : the U.S. refiner said on Jan. 25
the Red Sea attacks have led to a rise in freight rates for
crude oil.
LOGISTICS
** DHL DHLn.DE : the German logistic company, which does
not operate ships but uses them to transport containers, on Jan.
8 advised customers to take a close look at how they manage
inventories.
** FEDEX FDX.N : the U.S. parcel delivery giant said on
Jan. 14 it hadn't seen much of a shift to air freight due to
disruptions in the Red Sea.
RETAILERS
** ADIDAS ADSGn.DE : CEO said on Feb. 1 that shipping
disruptions in the Red Sea were negative for gross margins,
adding that "exploding" freight rates were driving up costs and
shipping delays were causing some delivery issues.
** DANONE DANO.PA : the French food group said in
December that most of its shipments had been diverted,
increasing transit times. Should the situation last beyond 2-3
months, Danone will activate mitigation plans, including using
alternate routes, its spokesperson said.
** IKEA: the furniture retailer is sticking to planned price
cuts despite increased costs, and has sufficient stocks to
absorb any supply chain shocks, it said on Jan. 15.
** MARKS & SPENCER MKS.L : the British retailer's CEO said
on Jan. 11 the company is expecting some slight delay in
clothing and home deliveries from disruption to shipping.
** NEXT NXT.L : the British clothing retailer's CEO on Jan.
4 said sales growth would likely be moderated if disruptions
continued through 2024.
** PEPCO PCOP.WA : the Poundland owner warned on Jan. 18
its supply could be impacted in coming months if disruptions
continue.
** PRIMARK: Associated British Foods' ABF.L finance
director said on Jan. 23 Primark is coping with disruptions by
adjusting timings and stock flow.
** SAINSBURY'S SBRY.L : "We're making sure that we plan the
sequencing of product from Asia Pacific so that we get products
in the right order," the company's CEO said, adding that long
term contracts with shippers "mitigate any cost impact as far as
possible".
** TARGET TGT.N : the U.S. retailer is experiencing some
disruptions of shipments from India and Pakistan, a source
familiar with the matter said on Jan. 12, calling the effect
"minor" overall.
** TRACTOR SUPPLY TSCO.O : deliveries for the U.S. retailer
have been delayed anywhere from two to 20-plus days, the
company's chief supply chain operator said on Jan. 12.
** WILLIAMS-SONOMA WSM.N : the Pottery Barn owner is
rerouting shipments and has been working on contingency plans,
CEO told CNBC on Jan. 24.
OTHER
** AKZO NOBEL AKZO.AS : the Dutch paints and coatings
maker's CFO said on Feb. 7 that longer supply lines and
increasing costs could impact the company, which sources its raw
materials from China.
"For us it's a working capital impact, but it's manageable,"
he added.
** BHP GROUP BHX.AX : the Australian mining giant on Jan.
25 said the disruptions were forcing some of its freight service
providers to take alternative routes, such as Africa's Cape of
Good Hope.
** ELECTROLUX ELUXb.ST : the Swedish home appliance maker
has set up a task force to find alternative routes or identify
priority deliveries to try to avoid disruptions.
On Feb. 2 its CEO said that costs related to the
developments in the Red Sea were manageable. "If the situation
is prolonged I am more worried about higher costs than about
risk of having to pause production," he added.
** ESSITY ESSITYa.ST : the maker of brands such as Libresse
and TENA said it was staying in contact with impacted suppliers
to ensure continued flow of goods. On Jan. 25 its CEO said that
it saw a negative impact on its freight costs but he could not
specify what that impact would amount to.
** EVONIK EVKn.DE : the speciality chemicals maker said it
was being hit by "short notice routing changes and delays", and
was trying to mitigate the impact by ordering earlier and
switching to air freight where possible.
** GECHEM GMBH & CO KG: the German chemicals maker said it
had lowered production of dishwasher and toilet tablets as a
result of the delays.
** KONE KNEBV.HE : the Finnish elevator maker said the
situation may in some cases delay shipments, but most of its
customer deliveries should stay on schedule. Kone said it had
prepared for the disruptions by seeking alternative delivery
methods and routes.
** LEVI STRAUSS & CO LEVI.N : the denim maker is
experiencing delays of 10 to 14 days in transit times as a
result of continued disruptions to Red Sea shipping. It has
shifted some U.S. shipments to the West Coast, avoiding the Red
Sea and Suez Canal.
** LOGITECH LOGN.S : the computer peripheral maker's CEO on
Jan. 23 said profit margins will be hit by higher transport
costs due to the Red Sea crisis.
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FACTBOX-Shipping firms avoid Red Sea as Houthi attacks increase
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FACTBOX-Sectors most exposed to disruption from Red Sea attacks
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(Compiled by Izabela Niemiec and Paolo Laudani in Gdansk,
Mrinalika Roy in Bengaluru; Editing by Milla Nissi, Emelia
Sithole-Matarise, Mark Potter and David Evans)
((izabela.niemiec@thomsonreuters.com;
paolo.laudani@thomsonreuters.com))