The global shipping industry is facing challenges due to escalating Houthi attacks in the Red Sea, leading to skyrocketing shipping rates. Carriers avoiding the affected area are experiencing longer transit times around Africa, resulting in higher costs, delayed deliveries, and disruptions in the global supply chain. Retailers, particularly affected, are encountering delays in the delivery of spring and summer goods, including clothing, electronics, and home goods.

With the approaching Chinese New Year, retailers are under time pressure to get their products out of China before the shutdown. Matthew Burgess, VP of Global Ocean Services at C.H. Robinson, anticipates increased shipping volumes before the holiday, compounding existing delays in the logistics market. To address these challenges, retailers are exploring alternative delivery methods, such as air shipping, despite increased costs.

Rodney Manzo, CEO of Anvyl, suggests that major players may choose air shipping over ocean shipping to reduce transit time. Traditional air freight is seen as an alternative, but contingency plans may include a combination of sea and air solutions, expedited services, transloading, and less-than-container load (LCL). Monitoring the spot market is recommended for industry-wide shifts.

Due to the disruption, contingency plans are rolling out slower than usual, but a quick adaptation is expected as people return to the office. Burgess emphasizes the need for shippers to focus on their entire supply chain, building risk mitigation strategies amid evolving geopolitical climates. Retailers are expected to draw lessons from their COVID-19 playbook by increasing safety stock to buffer against disruptions temporarily.

While nearshoring and supply chain diversification during the pandemic have positioned some retailers better, unforeseen disruptions still pose challenges. Manzo notes a lag in response to unforeseen events, resembling a supply chain bullwhip effect. Despite the challenges, retailers are better prepared, having learned from previous disruptions and implemented measures to combat current challenges.