Gulf Shipping Crisis Disrupts Supply Chains
The closure of the Strait of Hormuz is disrupting global shipping, potentially causing delays and higher costs for Caribbean resort supplies Strait of Hormuz closure cuts off Gulf container shipping as carriers withdraw.
The Strait of Hormuz closure is impacting shipping, with traffic down an estimated 70%. Approximately 150 tankers are reportedly stuck in the Persian Gulf. Some shipping lines are suspending bookings in the area. Alternatives to the Strait, such as pipelines running through Saudi Arabia and the UAE, have limited capacity. Saudi Arabia's East-West Pipeline has a capacity of about 7 million barrels per day, but historically loadings have been much lower. The Abu Dhabi Crude Oil Pipeline has a capacity of approximately 1.5 million barrels per day. This disruption could exacerbate existing supply chain issues for Sandals Resorts. Sandals has faced challenges in the past with sourcing local food and supplies and underwent a $37 million renovation that was impacted by supply chain problems. The company's reopening of Sandals Royal Bahamian resort was delayed due to these issues. Sandals has been described as an important economic player in the Caribbean. They have faced challenges ranging from being acknowledged as the biggest taxpayer in the tourism sector to legal challenges. Sandals is one of the largest employers in the Caribbean, with approximately 20,000 staff.
