The ongoing conflict with Iran is causing significant disruptions for small businesses across the United States, leading to shipping complications, higher costs, and reduced consumer spending. Business owners from various sectors report challenges including stranded goods, increased shipping fees, and supply shortages.
Jared Lorraine, chief operating officer of Nichols Farms in California, a pistachio grower and processor, said exports account for about half of their business. The closure of the Strait of Hormuz has left approximately $3.5 million worth of pistachios stranded at sea, unable to reach customers in the Middle East. 'A lot of it has just been in limbo,' Lorraine said, noting that the food system disruption is as serious as the oil crisis.
Matthew Tran, founder of the Los Angeles-based footwear brand Birchbury, has seen shipping costs double from $3,500 to $7,000 per container from Vietnam. Lead times have increased by three to four weeks. Tran expressed concern that rising petrol prices may deter customers from discretionary spending. 'People just don’t want to spend money at the end of the day,' he said.
Jake Wilson, owner of Top Class Lawn Care in Kansas City, Missouri, received warnings from suppliers about imminent price hikes for fertiliser after the war began. The Middle East supplies nearly 30% of global fertiliser exports, according to the International Fertilizer Association. Wilson has started stockpiling supplies to mitigate the impact.
Brandon Fried, executive director of the Airforwarders Association, described the situation as a 'perfect storm' for small businesses, with rising costs, changing routes, and tightening capacity occurring simultaneously. While the pandemic caused worse supply chain disruptions, business owners fear prolonged conflict could bring similar challenges.
