Redington Shifts to Air Freight Amid Gulf Conflict Disruptions
Redington turns to air freight as Gulf conflict disrupts sea routes
The Economic TimesImage: The Economic Times
Redington, an Indian IT goods distributor, is increasing its reliance on air freight to navigate disruptions caused by the ongoing conflict in the Gulf region. With sea routes affected, the company anticipates a revenue growth of 10% to 15% in fiscal 2027 despite rising costs and cautious spending in the UAE and Saudi Arabia.
- 01Redington is increasing air freight usage due to disrupted sea routes in the Gulf.
- 02Air freight rates have surged since the conflict began in February.
- 03The company expects revenue growth of 10% to 15% in fiscal 2027.
- 04Redington is redistributing inventory and adjusting logistics to mitigate risks.
- 05Major clients include Apple, Dell, Samsung, Lenovo, and HP.
Advertisement
In-Article Ad
Redington, an Indian IT goods distributor, has significantly ramped up its use of air freight to maintain product flow into the Middle East amid disruptions caused by the ongoing conflict in the Gulf region. According to V. S. Hariharan, managing director and group CEO, air freight rates have increased sharply since the U.S.-Israeli war on Iran began in late February, driven by higher fuel costs and disrupted sea shipments. The closure of the Strait of Hormuz has forced Redington to adapt its logistics, moving a larger portion of its products by air instead of sea. The company serves over 40 markets, including the United Arab Emirates and Saudi Arabia, with nearly half of its revenue coming from markets outside India, Singapore, and South Asia. Despite a decrease in demand in the UAE and Saudi Arabia due to supply constraints and cautious consumer spending, Redington projects a revenue increase of 10% to 15% in fiscal 2027, with profit growth expected to align with revenue gains. The company is also redistributing inventory across its warehouses to mitigate potential damage from the conflict and is arranging alternative insurance coverage after insurers withdrew war-risk coverage. Major vendors include Apple, which accounts for about a third of Redington's revenue, as well as Dell, Samsung, Lenovo, and HP.
Advertisement
In-Article Ad
The shift to air freight and increased costs may lead to higher prices for consumers in the Middle East as Redington passes on some of the added costs.
Advertisement
In-Article Ad
Reader Poll
How do you feel about companies increasing air freight to mitigate supply chain disruptions?
Connecting to poll...
Read the original article
Visit the source for the complete story.
