Tesla has announced a suspension of most car production at its factory near Berlin for two weeks from the end of this month, due to a squeeze on component supplies as ships avoid the Red Sea and come to Europe via the Cape of Good Hope, adding up to 10 days to transit time.
"The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Gruenheide," Tesla said in a statement.
Other companies, including China's second largest car maker Geely and the Swedish home furnishing giant Ikea have warned of possible disruption to manufacturing.
"Relying on so many key components from Asia, and specifically China, has been a potential weak spot in any automaker’s supply chain," said Sam Fiorani, vice president at AutoForecast Solutions.
"Tesla relies heavily on China for battery components, which need to be transported to Europe through the Red Sea, putting production constantly at risk."
More transit time, more cost
The escalating conflict in the Red Sea has reignited inflationary fears and concerns over supply chains as shipping companies opt for expensive rerouting options, rather than passing through the conflict zone.
Shipping giants Hapag-Lloyd and Maersk have been rerouting their vessels round the southern tip of Africa for the past two weeks, a process that not only adds extra days at sea, but also costs an estimated extra $1 million per ship.
"At least 20 per cent of global shipping is being disrupted by long journey times and port congestion," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"The risk is that supply chains are tightening up around the globe, increasing the risk of bottlenecks, which could once again fuel inflation."
UK grocery giant Tesco this week announced prices in its shops could rise, given increased shipping costs. The supermarket chain stressed it was not a foregone conclusion that the extra costs would be passed on to consumers, as the situation remains uncertain.
Meanwhile, clothing chain Next and footwear company Crocs have also warned of delays to deliveries.
Inflation fears
Meanwhile, broader inflationary concerns were raised as oil prices rose 2 per cent on Friday, following the air and sea strikes on Houthi military targets in Yemen carried out by US and British forces in response to attacks by the Iran-backed group on shipping in the Red Sea.
Oil prices have risen by about 7 per cent since early December, before Houthi rebels started their attacks on ships passing through Bab Al Mandeb.
The events in the Red Sea added to market concerns over the potential for a broader conflict in the Middle East and the effect that might have on oil supplies from the region, especially those passing through the crucial Strait of Hormuz.
"If a large part of Strait of Hormuz flows were to be halted, it would present up to three times the impact of the 1970s oil price shocks and over double the impact of the Ukraine war on gas markets, atop already fragile supply chains and stock levels," said Saul Kavonic, an energy analyst at MST Marquee.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Killing of Qassem Suleimani
Killing of Qassem Suleimani
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VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
Zayed Sustainability Prize
If you go
Flying
Despite the extreme distance, flying to Fairbanks is relatively simple, requiring just one transfer in Seattle, which can be reached directly from Dubai with Emirates for Dh6,800 return.
Touring
Gondwana Ecotours’ seven-day Polar Bear Adventure starts in Fairbanks in central Alaska before visiting Kaktovik and Utqiarvik on the North Slope. Polar bear viewing is highly likely in Kaktovik, with up to five two-hour boat tours included. Prices start from Dh11,500 per person, with all local flights, meals and accommodation included; gondwanaecotours.com
More coverage from the Future Forum
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
So what is Spicy Chickenjoy?
Just as McDonald’s has the Big Mac, Jollibee has Spicy Chickenjoy – a piece of fried chicken that’s crispy and spicy on the outside and comes with a side of spaghetti, all covered in tomato sauce and topped with sausage slices and ground beef. It sounds like a recipe that a child would come up with, but perhaps that’s the point – a flavourbomb combination of cheap comfort foods. Chickenjoy is Jollibee’s best-selling product in every country in which it has a presence.
UAE currency: the story behind the money in your pockets
What is a calorie?
A food calorie, or kilocalorie, is a measure of nutritional energy generated from what is consumed.
One calorie, is the amount of heat needed to raise the temperature of 1 kilogram of water by 1°C.
A kilocalorie represents a 1,000 true calories of energy.
Energy density figures are often quoted as calories per serving, with one gram of fat in food containing nine calories, and a gram of protein or carbohydrate providing about four.
Alcohol contains about seven calories a gram.
Zayed Sustainability Prize
The years Ramadan fell in May
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'Midnights'
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Killing of Qassem Suleimani
