Iran War Disrupts US Small Businesses with Shipping
The Iran conflict is complicating life for small business owners nationwide, as they face shipping issues, rising expenses, and consumers becoming more cautious with their spending.
A footwear designer is having difficulties bringing in their shoes from Vietnam; a pistachio farmer has millions in pistachio exports stranded in the water; a landscaping business owner in Kansas City is hoarding fertilizer as prices soar; and a Chicago electronics shop proprietor is dealing with high gas prices.
Owners of small businesses report that the significant supply chain issues during the pandemic were more severe, but they worry that if the conflict continues for months, it could begin to approach that level.
"Expenses are increasing, the paths are shifting, and availability is constricting." "It's all occurring simultaneously, and that's an ideal scenario for small businesses," stated Brandon Fried, executive director of the Airforwarders Association, a trade organization for US firms that transport cargo through the supply chain across all transport modes.
The United States is the top pistachio exporter, with Iran in second place, as reported by the US Department of Agriculture.
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At Nichols Farms in Hanford, California, a fourth-generation pistachio grower and processor, chief operating officer Jared Lorraine stated that exports comprise approximately 50% of the business. They deliver to Europe, China, and more frequently, West Asia.
The effective closure of the Strait of Hormuz has made it impossible to deliver pistachios to several clients. When the war started, he estimates about $5 million worth of pistachios left stranded in the water, unable to be delivered to customers in Saudi Arabia, Iran and the United Arab Emirates.
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"While much of the public attention has been focused on oil, which is significant, really, the destruction of the food system is I think equally as serious," he said, adding 70% to 80% of food in the West Asia is imported.
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When the US bombed Iran on Feb. 28, Nichols Farms had about $5 million pistachios on ships that got stranded, Lorraine said. They managed to reroute some of the pistachios: one batch was offloaded in Jeddah, in Saudi Arabia, to be trucked to the UAE.
Another two loads were able to make it into a port in Oman after being reloaded into a smaller container in India that could make it into that port. But $3.5 million still sits on the water.