As Iran-backed Yemeni militants target ships in the lower Red Sea, global retailers, including industry giants like Walmart, H&M, and Target, face increased risks of disruptions in freight movement through the crucial Suez Canal trade route. Some shipping companies are considering longer voyages, potentially leading to extended wait times and higher prices for goods. Sectors such as consumer goods, apparel, and chemicals are identified as bearing the brunt of disruptions in shipping routes between Europe, the Middle East, and Asia. The Suez Canal, accounting for approximately 12% of global maritime traffic, is vital for major retailers in moving goods from key manufacturing markets in Asia. Extended disruptions could particularly impact the consumer goods sector, according to S&P Global. Fast-fashion companies importing goods from East Asian textile mills, such as H&M and Inditex, are highlighted as being at a higher risk. Some companies are already exploring alternatives like intermodal transport to navigate potential supply chain challenges.

SOURCE:GOOGLE