If you have plans to redecorate in the new year with your brand new Ikea furniture, there’s a good chance you’ll need to reschedule thanks to recent attacks on the Red Sea shipping route.
Ikea says it expects to face delays as a result of the emerging conflict in the Red Sea, after drone attacks from Houthi-controlled areas of Yemen started hitting the vital commercial passage near the Suez Canal earlier this week.
The group, backed by Iran, has stepped up its attacks since the onset of the Israel-Hamas war, with Yemeni rebels describing ships with ties to Israel as “legitimate targets” in November.
The conflict, which has seen the U.S. Military step in, risks the smooth passage of hundreds of millions of dollars worth of goods and could cause fresh havoc to the global supply chain.
Ikea furniture blocked again
Ikea has now become one of a growing list of companies to admit its products will take longer to get into the hands of customers as a result of the attacks.
“The situation in the Suez Canal will result in delays and may cause availability constraints for certain Ikea products,” a spokesperson for Ikea told Coins2Day.
“In the meantime, we are evaluating other supply options to secure the availability of our products.”
The spokesperson added that Ikea does not own any container vessels, and all its shipments were managed by transportation partners.
The group didn’t elaborate on which of its products would face delays or how long it expected lag times to be.
Other companies likely to be subjected to delays include budget retail giant Lidl and Swedish automotive group Volvo.
In a blog post, logistics group Flexport estimated that rerouting ships via the Cape of Good Hope in South Africa would add up to 10 days to their journey. It added that as of Wednesday, more than 170 ships had been diverted south of Africa and 35 more had been delayed in the Red Sea.
Price cut promises in spotlight
Ikea has become well-versed in the trials of delays through its shipping channels in recent years.
The group was one of the major victims of the 2021 Suez Canal blockage when the Ever Given cargo ship ran aground in the major passageway linking the Red Sea and the Mediterranean.
While its wider supply chain was affected by the six-day blockage, Ikea was also much closer to the action, with its furniture stuck on the stranded Ever Given ship months after the canal was cleared.
The company has more generally struggled with supply chain snags that began with the COVID-19 pandemic, forcing it to hike prices in 2021.
However, this year has seen supply chains largely return to normality as inflation slowly returns to Central Bank targets of 2%. Ikea began to lower prices this year as it aimed to stick to its promise of “democratic design.”
In November, the deputy CEO of Ikea stores owner Ingka said the group planned to spend $1.1 billion next year to absorb costs so it could further bring down prices for consumers.
“People have thin wallets, but they still have needs, dreams, and frustrations,” Juvencio Maeztu told Coins2Day.
“That’s why Ikea has become a destination for those who want to maximize the value of their money. Ikea is made for crisis, so to speak.”
A spokesperson didn’t comment on whether this promise to cut prices might be affected by the attacks on the Red Sea and ensuing divergences.
