T
The conflict in the Middle East is affecting the activities of exporting companies. The first textile company to reveal this impact was Riopele, who had to rethink the entire logistics system and seek out new maritime routes in order to respond to customers.
‘The war between Israel and Hamas, followed by the attacks on ships in the Suez Canal by the Houthi group, led the major shipping companies to divert their normal route through the Red Sea to southern Africa, via the Cape of Good Hope, with the direct consequence of increasing freight and transit times,’ says Paulo Oliveira, director of the purchasing department of Riopele. According to the company, a container from Asia now takes 60 days instead of the standard 45.
Mundotêxtil, Portugal’s leading terry producer, also admits that it is being impacted in various ways by the conflict in the Middle East. ‘In addition to the challenges in purchasing/supply, we have had delays in deliveries due to transport, directly affecting our customers who order with shorter delivery times, and which has required more precise and agile logistics management,’ managing director Ana Vaz Pinheiro told T Jornal.
‘These days, transport takes around two months, compared to the usual 22/25 days from Pakistan and India. This has resulted in significant increases in transport and container insurance costs,’ she continues. She concludes that the company is adjusting its processes ‘to provision more in advance, which implies an increase in financial availability to maintain adequate stock levels’.