LOFA has issued a warning that its members are facing shipping delays and rising costs following terrorist attacks on cargo vessels in the Red Sea.

The Leisure and Outdoor Furniture Association has issued the following statement: “Amidst a turbulent three years, our hopes for a calmer 2024 have been dashed. The industry now faces yet another hurdle, courtesy of Yemen Houthis. Since November, they have been targeting vessels in the Red Sea as a show of support for Hamas. As a result, major shipping companies used by LOFA members have been forced to detour around Africa's Cape of Good Hope instead of using the Suez Canal, incurring longer journeys and higher costs.

“Avoiding the Suez Canal, which handles approximately 12% of global trade, will add 10-14 days and 3500 nautical miles to shipping routes. Although the situation in the Red Sea is unpredictable and adjustments may be made if security improves, shipping companies are once again increasing costs, to the detriment of supply chains. 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.

“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. 

“To address the threat in the Red Sea, 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.

“Regardless of the results of military intervention and a resumed Suez route, it seems likely that higher costs and delays will continue in the run up to and possibly well beyond Chinese New Year. The situation will not only impact the outdoor leisure industry but will affect all supply chains routing through the Suez Canal.”