It was seen coming and it finally happened. International maritime crisis caused by attacks on ships in the Red Sea by Houthi forces in Yemen This situation is already fully affecting the sector in the province of Alicante, which is suffering due to delays in the transportation of goods and rapidly rising prices.. The decision of major shipping companies to suspend routes through the Suez Canal has caused import routes from Asia to be extended by more than 8,000 kilometers. This means ships are taking twenty days longer to complete the journey and costs have quadrupled.. Although footwear and textiles were the first sectors to begin to be affected by the consequences of the conflict, they will soon spread to other sectors.
The industry is not exactly experiencing its best period because The general decline in consumption directly affects companies’ income statements. The crisis in the Red Sea in the middle of this scenario only served to further complicate the existing sensitive scenario. The cost increases feared in the early stages of the conflict have now become a harsh reality, accompanied by delays in the arrival of goods from Asia. This is no small problem, considering that between January and October the state purchased €1,823 million worth of products from Asian markets, representing 39.5% of the total.
Provincial footwear, which made purchases of 564 million euros in the first 10 months of 2023 on this continent, was one of the first sectors to notice the negative effects. Marián Cano, president of the Association of Footwear Entrepreneurs of Valencia (Avecal), underlines: “We are already encountering delays in transportation of twenty days or more as a result of the detours that ships have to navigate, which means: This is a serious problem for a fashion-related industry like ours, where compliance with delivery times is important.”. Added to this is the increase in costs, Cano adds: “Given the circumstances, it could cause problems both with replacements and subsequent collections to be released.” Companies will have a hard time determining prices.”.
With similar statements, Manuel Román, President of the Spanish Association of Footwear Components (AEC), underlines that the industry is currently facing serious price increases. There is no fixed rate as we look ahead to the coming weeks, which, he says, “predicts much more significant increases than we’ve had so far.”.
Although most of the shoes imported from China are raw materials, there are also finished products. The same thing is happening in textiles, another sector that is already suffering heavily from what is happening in the Red Sea. This is stated by Pepe Serna, president of the Association of Textile Entrepreneurs of the Valencian Community (Ateval), who underlines: The price of containers quadrupled to $6,500. “There are many concerns, not only in terms of unforeseen costs, but also because of the impact delays can have on production chains,” he notes.
On the other hand, the impact on the plastics industry is not as pronounced at the moment, this is because companies have not been operating as much in time for the Christmas season. But Héctor Torrente, director of the Ibiae employers’ association, believes: “Delays and cost increases will occur as soon as companies begin switching raw materialsThis will happen in just a week or two.
A similar situation is happening in the toy industry, which entered a period of inactivity after the Three Kings campaign passed, waiting for the main fairs to arrive. But José Antonio Pastor, director general of the Spanish Association of Toy Manufacturers (AEFJ), is aware that there are concerns. “Let’s see what we will see when companies restart production.”he emphasizes.
We must also add the condition that to the most important sectors of the province of Alicante, other industries at the level of the Valencian Community, such as ceramics, household appliances or food, also suffer in a context where transport companies such as CMA CGM are negatively affected. As MSC had done before, they announced that they would double their prices, in this case by 40%, starting from January 15th.
Port of Alicante is not afraid of big challenges
The Port of Alicante does not fear that the Red Sea crisis will lead to serious complications. Institutional sources explain that they are waiting for the events to develop, but confirm that this will not directly affect the traffic at the port. They also do not believe that companies operating in the region will experience serious problems. On the other hand, they are aware that there will be an increase in the costs of goods passing through that region on a general level, as is currently the case.