HIGH POINT – A few months ago, several furniture importers said they were dealing with delays and container rate hikes due to the politically charged Red Sea ordeal, with some companies opting to make major adjustments to get product more reliably.
Ocean container rates climbed 200% in the weeks following the first attacks in late December. In early February, rates began to fall. Over the past five weeks, spot rates have fallen around 23%. They now sit at an average of $2,929 per 40-foot container, a number still 71% higher than the same week last year, and 106% higher than pre-pandemic 2019.
Furniture importers are still reporting delays and rate hikes, but not at the level they were in January. East Coast importer BDI, at the time, was one to report an impact severe enough that it opted to ship half of its product over the Pacific Ocean to the West Coast and then rail it across the country.
“We tested the West Coast earlier this year,” said Hanna Hajjar, vice president of operations. “It worked as expected. It shortened transit time by about two weeks. It made sense to try it as a backup plan earlier and especially when rates were fairly similar (to each coast). However, rates to the West Coast are back to 70% higher than all water options.
“There is a new norm or pattern now where vessels are going around the horn of Africa, so we are factoring in for longer transit time,” he continued. “Our biggest issue now is blank sailings due to soft demand from Asia, a variable we have no control over.”
Martin Svensson is another company to report an impact, though one that’s lessening.
“In general, transit times have increased around six days as a result of going around Africa as opposed to using the Suez Canal,” said Pat Watson, director of product development. “We are fortunate to have a logistics team that predicted these challenges early. As a result, our market samples arrived on time with no problems. Surprisingly, rates seem to have held relatively steady and are even coming down in some cases.”
East Coast importers Napa Furniture and Bernards both reported that the issue is easing.
“Yes, we were experiencing some delays and rate hikes,” said Bobby Papazian, Napa’s partner vice president of sales and marketing. “It has eased recently. Cube rates have gone down. Some lead times are still an issue. Now, it’s the Muslim holiday that will slow containers.”
For Premarket, Bernards shifted shipping over to the West Coast. Samples were team-trucked (when two drivers take turns hauling freight) across the company to High Point. The samples arrived in time, but the challenge persisted for the upcoming Market.
“Getting all the samples on time (for Market) has certainly been a challenge,” said Micah Swick, Bernards president. “We still have a few coming in next week, but void of any surprises, we will have them all. I think Red Sea concerns have taken a back seat to the lackluster economic conditions.”
As in a previous report, West Coast importers seem to be less affected, as their freight gets to avoid the Suez and Africa entirely.
Pat Hayes, vice president of product development for California-based Martin Furniture, said the company is experiencing steady shipping rates and no delays. The same was true for Washington-based A-America.
“Things seem to be back on track in large part,” said Christian Rohrbach, A-America president. “I think the shipping companies complained, they cashed in, and now they’ve adapted. I think they would have liked to cash in a little longer.”
If your company is experiencing delays or disruptions related to the turmoil in the Red Sea, email Bobby Dalheim at rdalheim@furnituretoday.com.