The Leisure and Outdoor Furniture Association (LOFA) is facing a new challenge in 2024 due to the actions of Yemen Houthis. The armed group has been targeting vessels in the Red Sea since November 2023 as a show of support for Hamas.

Longer journeys and higher costs

This has forced major shipping companies used by LOFA members to detour around Africa’s Cape of Good Hope instead of using the Suez Canal, adding 10-14 days and 3500 nautical miles to shipping routes, incurring higher costs.

Shipping companies are once again increasing prices.  While the cost increase may not reach COVID levels, it is feared that this disruption could also drive-up oil prices, leading to higher fuel prices and inflation.

Surcharges

LOFA members will do their best to alleviate this situation, but they cannot sustain another massive hike in container costs. They may have no choice but to pass on these significant increases down the supply chain.

Some companies are already facing resistance from customers regarding these surcharges, but it is important to understand that suppliers have limited control over pricing in rare Force Majeure events such as these.

Delays well beyond Chinese New Year

The US has launched an international naval operation, joined by nations like the UK, Canada, France, Bahrain, Norway, and Spain.  However, some shipping companies remain wary of resuming operations immediately, concerned about container shortages and port congestion that could result from extended vessel rotations.

It seems likely that higher costs and delays will continue in the run up to and possibly well beyond Chinese New Year (Saturday 10th February).

The situation will not only impact the outdoor leisure industry but also other sectors that rely on global trade

Editorial from https://www.gardenforum.co.uk/