Perfect Storm at Sea: Shipping Route Disruptions Could Squeeze Retailers and Supply Chains
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Attacks by Houthi rebels on ships in the Red Sea and drought conditions in the Panama Canal have disrupted global shipping routes. This "perfect storm" could impact U.S. retailers relying on sea freight.
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The Red Sea and Suez Canal route accounts for 12% of global trade. Drought has reduced ship transits through the Panama Canal, which handles 7% of global seaborne trade.
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Shipping giant Maersk has diverted vessels around Africa's Cape of Good Hope to avoid the volatile Red Sea area. But this longer journey could further squeeze U.S. supply chains.
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British retailer Next warned that Houthi attacks could delay stock deliveries by up to 2.5 weeks. U.S. chains like Walmart and Target also face potential ripple effects when they next report.
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Post-pandemic shipping snarls revealed the importance of resilient logistics. Disruptions to major maritime trade arteries now threaten fragile supply chains.