The Red Sea Crisis : Disrupting Global Supply Chains and Maritime Trade

It's critically important that everyone knows about the Red Sea crisis 🚢.

If you think this won't affect you, think again. The repercussions will sooner or later reach all the supply chains using this route and beyond. 🌐

Here's Why :

1️⃣ TIME Impact : As shipping lines avoid the Red Sea for security reasons, a chain reaction occurs. Cargo ships that bypass Africa instead of using the Suez Canal add 10 to 14 days to shipping times. Time-sensitive goods such as manufacturing components suffer, causing delays in the supply chain.

2️⃣ SPOILAGE Threat : Fresh produce and temperature-controlled (cold chain) goods, such as food and medicines, are at risk of deterioration due to unforeseen additional shipping delays. Shortages may occur until stocks are replenished and an appropriate transport solution is put in place.

3️⃣ INCREASED costs : The diversion leads to additional fuel costs of one million dollars for each return trip between Asia and Northern Europe. Shippers are bearing this cost now and in the future, and passing it on to consumers. The increase in fuel consumption is likely to affect everyone because of the rise in demand.

4️⃣ CONGESTION woes : Disruption to shipping schedules leads to late arrivals of ships, causing congestion in ports and accumulating delays. Diversions to other ports exacerbate the problem, creating a global container imbalance. This imbalance translates into longer lead times for the return of empty shipping containers, leading to shortages and affecting container freight stations, bonded warehousing and deliveries.

5️⃣ The AIR FREIGHT crisis : To compensate for the extra transit time of 10 to 14 days, companies are resorting to air freight for items that cannot wait. This reduces air freight capacity, leading to higher air freight prices.

Like waves in a pond, these consequences will affect most of us. So we need to be prepared, Plan ahead, examine your supply chain and carry out a risk analysis. Discuss options with your freight forwarders and suppliers to minimise the impact and maintain resilience. 🌊✈️

What is the impact of the current crisis on global trade and supply chain operations ?

What are the current implications of the crisis in the Red Sea region for maritime traffic, security and geopolitical stability ?