In its latest North American market update, logistics giant Maersk says that seven months into the Red Sea situation, the impact on maritime shipping and global supply chains continues to intensify.
Maersk highlights that before the late 2023 attacks, 12% of global trade went through the Suez Canal. Now, ship traffic has dropped by 66% as carriers reroute their vessels around Africa.
The logistics industry has been driven to innovate and think quickly to keep the supply chain moving.
Red Sea is causing waves: A rundown so far
The business world waited with bated breath to see what they would have to deal with throughout a busy holiday season in 2023.
The retail industry first saw industry player Target affected by the disruptions in supply due to shipments from India and Pakistan.
By January, shipping companies decided to avoid the Red Sea. The Cape of Good Hope route had become the alternative.
In the same month, Australia recalled a vessel carrying livestock for safety reasons.
Shippers then started to consider airfreight to mitigate the challenges of the Red Sea disruptions.
In February, The British Chamber of Commerce (BCC) released a report on the scale of the disruptions caused by the crisis. This found that almost 37% of companies surveyed in the report say they have been impacted by the crisis.
Fast forward to September, and the supply chain is still being plagued by the logistics nightmare. With no end in sight, logistics companies have to keep cargo moving.
How can businesses strengthen their supply chain?
Logistics companies are faced with many challenges due to the ongoing Red Sea crisis. Here are some ways you can strengthen your supply chain to handle disruptions.
- Diversifying suppliers: Use multiple sources from different regions to reduce the risk of local disruptions.
- Building partnerships: Work with reliable partners to plan alternative shipping routes and transportation methods.
- Invest in technology: Use data and analytics to predict and address supply chain challenges more effectively.
NOW READ: The Red Sea effect: Salalah Port introduces alternative
Photo Credit: Maersk
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About the author
Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.
