IKEA vows to avoid carriers using Cape route for Asia-Europe services

5/24/2020

The decision of some container lines to steam around the Cape of Good Hope to avoid Suez Canal tolls is facing pushback from at least one leading shipper, with IKEA pledging to only use lines that support its sustainable supply chain efforts.

A spokesperson for the multinational told Lloyd’s Loading List that use of the longer route had “raised concerns of increased greenhouse gas emissions due to the longer sailing distances” and that assurances has been sought from shipping lines about its ongoing use.

Carriers had responded that the route was used temporarily as “a result of closed warehouses and stores in the receiving countries”, an IKEA spokesperson said.

The spokesperson added: “We have been in contact with our contracted shipping lines and have got a confirmation that this route was used only for a limited period of time.”

IKEA said it would consider not booking slots with lines that continued to utilise the route in future. “We have an ambitious climate agenda and stringent carbon reduction goals,” said the spokesperson. “From this perspective, it is key is to increase fuel efficiency, replace fossil fuels with alternatives and introduce new technologies.

“We will favour shipping lines that share this direction so that we together can achieve a transition into a climate positive ocean shipping.”

As reported in Lloyd’s Loading List, container lines steam around the Cape of Good Hope to avoid Suez Canal tolls that can total around $700,000 for a fully laden 20,000 TEU capacity container ship.

Alphaliner reported earlier this month that the number of containerships opting to use the Cape route to bypass the Suez Canal had risen to a historic peacetime high, with at least 20 sailings known to have used the longer route since the end of March.

An IKEA spokesperson said that although use of the Cape of Good Hope route was a concern due to additional emissions, shipping emissions more generally were falling.

“The Covid-19 situation and cancelled sailings the total CO2 and fuel usage in the ocean shipping industry are very much reduced in the last four months,” added the spokesperson. “In addition, we have been informed that most container lines have halted this route and are now back to choosing the Suez Canal for their head haul sailings.”

In the IKEA sustainability strategy – People & Planet Positive – the company outlined its goal to become Climate Positive by 2030. “For transports, in IKEA Supply Chain Operations, this goal translates to a 70% average carbon reduction from every transport we do,” said the spokesperson.

“Since ocean shipping is about 40% of the carbon footprint in IKEA Supply Chain Operations, it is a clear focus area for us,” IKEA told Lloyd’s Loading List. “We are in a continuous dialogue with our service providers, including the shipping lines, regarding our Sustainability agenda. Hence there is full transparency about our goals, objectives and priorities on how we plan to become Climate Positive by 2030.”