Don't look now, but those dreaded supply chain issues that persisted during the COVID pandemic are coming back, and experts say they're only getting worse. This time the culprits are war in the Middle East and drought in Central America. Ongoing tensions in the Red Sea have forced ships to reroute out of the busy Suez Canal, while drought in the Panama Canal has dropped the waters there to levels unsafe for many ships.
"It's definitely a nightmare right now," says Peter Guinto, president of Aerospace and Defense for Resilinc, in an interview with Fox Business. "You have 20-to-30 percent of global shipping trade that goes through the Suez Canal, and now at least half of that trade is being interrupted, and is now going around the entire continent of Africa."
"You're taking containers out of circulation," Guinto continues. "When 20-to-30 percent of global trade happens there, that's 20-to-30 percent of containers that are out of circulation."
Consumers may not see the direct impact of these delays just yet, but various industries are already warning about them, including IKEA and Amazon. "We're seeing (issues with) companies like Tesla, the automotive industry, textiles," says Guinto. "There are finished goods that travel through the Suez Canal, but there are intermediate and raw materials as well...that take time to reach the manufacturers of the goods that are sold to consumers."
As for when these latest supply chain crunches will improve, that depends on foreign conflict and the weather. But Guinto says the news isn't all bad. "This is not the same global threat that COVID presented," he tells Fox. "A lot of smart businesses have already taken steps to adjust their supply chains to make sure disruption is not as severe as before."