BL&P: Attacks on cargo ships in Red Sea may affect operational costs

The Barbados Light and Power Company says current attacks on cargo ships by Houthi militants in the Red Sea have not yet impacted any shipments destined for its use.

However, officials from the company tell CBC News we may soon see some supply chain disruptions, as there has been a halt by major shipping companies using the Red Sea through the Suez Canal route, which is used as a short cut to connect Europe and the USA, as well as the Middle East and Asia.

In a comment issued in response to queries from CBC News about the possible impact of the situation on their operations, the BLPC says its major suppliers are within the USA, Europe, and Asia, and therefore they may see increased lead times on direct materials, as well as raw materials heading to their manufacturers.

The company adds that further fall out will come with increased freight costs, as some ships are now diverting from the Suez Canal, which can add up to two additional weeks to transit time, which increases the cost of operation.

In addition, for those shipping companies which continue to risk using the Suez Canal their insurance costs will rise significantly and will most likely be passed to the consumer.

The Light and Power also says that perhaps more importantly, we will see fuel prices increase, as oil companies commence to halt their shipments through the Red Sea.

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