Logistics

Disruptions on Critical Trade Routes Shake Global Supply Chains

Disruptions on Critical Trade Routes Shake Global Supply Chains

Sedat Onat
Disruptions on Critical Trade Routes Shake Global Supply Chains

Suez Canal, the main shipping corridor between Asia and Europe, experienced a 50 percent year-on-year decline in trade volume during the first two months of 2024 due to Houthi attacks in the Red Sea region. The situation has prompted shipping companies to reroute vessels around Cape of Good Hope, causing delivery delays. Panama Canal, which typically handles approximately 5 percent of global maritime trade, experienced a 32 percent decline in trade volume as authorities have significantly restricted daily vessel transits since October of the previous year due to severe drought conditions.


According to data from the IMF's PortWatch platform, trade volume around Cape of Good Hope increased 74 percent compared with levels from the previous year, while port calls to 70 ports in Sub-Saharan Africa declined 6.7 percent year-on-year in January and February 2024. The European Union and Middle East and Central Asia experienced a 5.3 percent decline.

The IMF warns that these disruptions could potentially affect inflation rates due to increased shipping costs and create complications for global trade and economic activity statistics. Trade reports for January from Africa, the Middle East, and Europe may reflect slowing import growth due to these disruptions. Additionally, low-income countries that rely heavily on import tariffs and export taxes may report lower-than-expected revenues for January.



Key Points

  • Significant declines in trade through Suez and Panama Canals are disrupting global supply chains.

  • Trade volume on Suez Canal fell 50 percent due to Houthi attacks.

  • Trade through Panama Canal declined 32 percent due to drought.

  • Trade volume around Cape of Good Hope increased 74 percent.

  • Port calls to Sub-Saharan Africa fell 6.7 percent, while European Union and Middle East and Central Asia declined 5.3 percent.

  • Increased shipping costs may impact inflation rates and global trade and economic activity statistics.



News Link: https://en.portnews.ru/news/360632/

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