The ongoing Iran war is significantly impacting small business owners across the United States, leading to numerous challenges including shipping difficulties, increased operational costs, and a reduction in consumer spending. Many entrepreneurs are now facing a perfect storm of complications as they navigate these issues.
Among the affected businesses, a shoe designer based in Los Angeles is having trouble importing products from Vietnam. Meanwhile, a California-based pistachio grower reports having millions of dollars’ worth of pistachio exports stranded due to the conflict. In Kansas City, a home landscaper is stockpiling fertilizer in anticipation of rising prices, and a Chicago electronics shop owner is grappling with surging fuel costs for delivery operations.
Small business owners believe that, while the shipping disruptions experienced during the COVID-19 pandemic were severe, the current situation has unique challenges that could escalate if the war continues for an extended period. Brandon Fried, the executive director of the Airforwarders Association, emphasized the chaotic combination of rising costs, changing shipping routes, and tightened capacity that small companies are now facing.
In the pistachio industry, Nichols Farms in Hanford, California, is acutely aware of the implications of the war in Iran. Chief Operating Officer Jared Lorraine revealed that approximately 50% of their business relies on exports, with significant shipments being affected. Following the onset of hostilities, about $5 million worth of pistachios became stranded, unable to reach buyers in critical markets like Saudi Arabia, Iran, and the UAE due to the effective closure of the Strait of Hormuz. Lorraine noted that although attention often focuses on oil, the disruption to food supply chains is equally alarming, given that 70% to 80% of food in the Middle East is imported.
Matthew Tran, founder of Birchbury, a minimalist footwear brand, is also feeling the pinch. Transport costs for his products have doubled from $3,500 to $7,000 per container since the war began, and shipping lead times have extended by three to four weeks. Tran pointed out that while the supply chain was more stagnant during the pandemic, the uncertainty surrounding the war leaves him concerned about consumer behavior and spending because of rising gas prices.
In Kansas City, Jake Wilson, owner of Top Class Lawn Care, is proactively stockpiling fertilizer to manage anticipated price spikes resulting from the conflict. With the Middle East supplying a significant portion of global fertilizer exports, Wilson has been advised by suppliers to secure orders early to avoid compromised supplies and inflated costs later in the season. He is taking measures to order fertilizer through the end of the year to minimize the risk of drastic price increases that could impact his business profitability.
Another business adjusting to the economic impacts of the conflict is Abt Electronics in Chicago. With the surge in gas prices affecting delivery operations, co-president Jon Abt expressed concern about the feasibility of maintaining free shipping for customers, which has long been a competitive advantage. The company consumes significant amounts of diesel and gasoline for its delivery fleet, and ongoing price volatility will likely force them to reevaluate shipping policies in the near future.
Overall, these small business owners are navigating a complicated landscape shaped by the Iran war, characterized by rising costs, supply chain disruptions, and changing consumer behavior. As they adapt to these challenges, the outlook remains uncertain, particularly as the war’s duration and wider economic repercussions are still unfolding.
