Since spring 2023, we have provided regular updates on important logistics routes such as the Panama Canal (low water level) and the Red Sea (terror). Now, the first estimates of the economic impact are available and they are frightening.
Port Technology International & Russel Group:
⚡$1.25 trillion – the economic loss caused by disruption in two of the world’s largest shipping routes, the Red Sea and Panama Canal
📌 Blockages at two of the world’s largest shipping routes have thrown shipping schedules and global supply chains in disarray, as vessels are opting for longer alternative routes adding to delays and increasing costs.
📌 Red Sea: Trade analysis from October 2023 through to May 2024, shows that the commodities most impacted are crude oil, plastic materials, telephone equipment, cars, and clothing.
📌 Panama Canal: Russell’s analysis throughout 2023, highlights the commodities most impacted are LPG, crude oil, cars and people carriers.
📌 Clearly, it highlights the potential ripple effect of any disruption within a key transit route, which plays a vital role in moving goods across the world.
What to expect:
⏩Geopolitical tensions will remain high, there are no signs of ending – the opposite
⏩ Maritime supply chain disruptions will continue to impact ports with higher levels of congestion and delays and container availability
⏩ Companies increase their stocking levels with plans to order much earlier (risk of #bullwhipeffect)
Time to increase your overall risk & resilience program.
Source Content & Graphic: Port Technology International, September 12th, 2024
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