04/01/2024

In the midst of a perfect storm in international logistics, companies involved in the manufacturing of goods are facing unprecedented challenges.

The Suez and Panama canals, pillars of freight transport, are triggering complications that could affect the availability of goods from Asia.

The Suez Canal crisis

With approximately 12% of world trade and 30% of container traffic passing through the Suez Canal annually, its recent instability is greatly impacting the market in recent days. Due to the latest attacks in the Red Sea, the situation is forcing a recalculation of shipping routes. A large number of companies are already feeling the effects, with delays and constraints in the delivery of goods, especially seasonally limited items, such as textiles.

The sector is rushing to bring forward its purchases in order to shield the start of the season, bearing in mind that the time when goods normally arrive for the following season SS24 is set between March and April, this year in addition to the arrival of the Chinese New Year which is a peak time for the mobility of goods, we are faced with the attacks suffered on ships crossing the Red Sea.

Meanwhile, the drought in the Panama Canal delays shipments and makes routes more expensive, impacting economically essentially on goods from Japan, China and the US, due to the historic drought that limits traffic and has made maritime routes more expensive. Transport costs have doubled on some routes and face delays of up to 20 days, generating a 30% increase in freight costs.

These challenges, if they persist or worsen, could present new long-term obstacles to global supply chain stability. The industry is adapting, but it is crucial to be vigilant and take appropriate measures to mitigate their impact. One of the main objectives of keeping production on schedule is to plan ahead from the outset of development so that solutions such as the option to re-emphasise sea routes and avoid transit through the Red Sea are in place today.