Gentell Faces 30% Raw Material Jump as Hormuz Closure Lifts Shipping Costs to $4,500
Updated
Updated · CNBC · May 24
Gentell Faces 30% Raw Material Jump as Hormuz Closure Lifts Shipping Costs to $4,500
1 articles · Updated · CNBC · May 24
Gentell said oil-linked raw material costs for its medical dressings have risen by as much as 30%, while shipping a container from New Zealand to California now costs about $4,500, up from roughly $2,000 before the war.
The squeeze stems from the Strait of Hormuz closure, which has pushed U.S. gasoline above $4.50 a gallon and raised costs for petrochemicals used in thousands of everyday products.
Gentell cannot pass through all of the increase immediately because its biggest customer is the U.S. government through Medicare, with annual contracts covering supplies to nearly 5,000 nursing homes.
Executives called the hit a margin crunch for now, but said prices will rise if the conflict drags on; even after the strait reopens, experts expect shipping traffic to take months to normalize.
With a key waterway shut, are predictable supply chains and stable consumer prices now a thing of the past?
Are fixed-price government contracts pushing essential suppliers to a breaking point amid global crises?
Beyond military escorts, what economic strategies can secure supply chains from being held hostage by geopolitical conflict?