Another Auto Industry Delay with the Suez Canal Blockage

Regardless of how the container ship, Ever Given, became lodged in the Suez Canal, the blockage has delayed items for the auto industry.

To be fair, this blockage has caused a problem for nearly all areas of industry in many countries, but our focus is on the automotive market. This industry can’t afford another delay in the production process.

The Third Delay in a Year

So far, the auto industry has experienced three delays in the past twelve months. These delays have negatively impacted manufacturing for the industry as a whole. The first was the COVID-19 pandemic which shut down global manufacturing, the second was the shortage of semiconductors experienced earlier this year, and now a ship in the Suez Canal is blocking the delivery of goods to the various ports that will ship them to their destinations.

The Suez Canal is Where Many Items Move

This canal has been the main passageway for many ships to move items to destinations without the need to go around South America. With the canal blocked, an additional ten days would be needed if ships were to travel all the way down and around South American to through the canal deliver items to their destinations. Several ships were blocked from moving while the Ever Given was being dislodged.

Our Government is Monitoring the Situation

There isn’t much more that political leaders in our country can do other than to monitor the situation closely and ensure the Suez Canal is reopened for shipping. The market conditions caused by the blockage increased oil prices from the Middle East, and low levels of inventory could lead to trouble in the auto industry. Our government is keeping a sharp eye on this situation and will step in as needed.

The Supply Chain has been Disrupted

Global manufacturing of nearly every type is being impacted by the blockage in the Suez Canal. Currently, the auto industry has become vulnerable because of this being the third delay in the past twelve months. Right now, experts at J. D. Power estimate there are nearly one million fewer vehicles on dealer lots than is normally the case at this time of year. That could lead to delays in purchases and many customers turning to used models instead of new ones.

Will Our Government Need to Step In?

Getting a ship out of the Suez Canal might not need government assistance from our country, but many industries, including automotive, may need some assistance in the near future. If inventory levels dip much lower, it could lead to another year of sales issues when it comes to new models being sold.

We’ll have to keep an eye on things and see if this blockage has any long-term effects on the auto industry. Hopefully, once the canal is open and running smoothly again, production can ramp up and inventory levels will increase to where they need to be for regular sales.