• About us
  • Advertise
  • Contact
  • Nominate
  • Client’s Voice
  • Login
  • Register
📖 Magazine
The Global Economics
  • Home
  • Banking
  • Non Banking
  • Markets
  • Infrastructure
  • Lifestyle
  • FeatureNew
  • Awards
No Result
View All Result
  • Home
  • Banking
  • Non Banking
  • Markets
  • Infrastructure
  • Lifestyle
  • FeatureNew
  • Awards
No Result
View All Result
The Global Economics
No Result
View All Result
Home Infrastructure

Conflict, Pandemic, and Strikes Push Global Supply Chains to Breaking Point

The Global Economics by The Global Economics
October 3, 2024
in Infrastructure, Global Trade
Reading Time: 4 mins read
0
Conflict, Pandemic, and Strikes Push Global Supply Chains to Breaking Point

Conflict, Pandemic, and Strikes Push Global Supply Chains to Breaking Point

39
SHARES
217
VIEWS
FacebookTwitterRedditWhatsAppLinkedInFacebook

Global supply systems are once again under pressure due to the pandemic that disrupted worldwide trade through lockdowns and travel restrictions.

Shippers are dealing with many challenges, such as the Middle East conflict, the Central American drought, and US strike action. As a result, businesses are finding it difficult and more expensive to ship goods.

Why are there pressures on supply chains?

Over the past year, international shippers have faced challenges when moving goods.

The first one on the list is the disruption in the Middle East and its impact on trade across the Red Sea. The main shipping route has seen a two-thirds decrease in traffic since the Houthi rebel attack on vessels started earlier this year. The route covered 12% of all trade worldwide before the attacks.

Many companies, including well-known shipping firms like Maersk, have given up on the route and traveling around the Cape of Good Hope, which will add additional expenses and ten days more to the journey.

There are concerns that more ships may avoid the route due to the current increase in conflicts in the Middle East.

Since most container ships are avoiding the Red Sea, Peter Sand, chief analyst at maritime analytics platform Xeneta, believes the recent escalation will have less impact.

Fewer ships are now passing through the Panama Canal due to a drought that reduced the daily limit from 36 to 20.

Fears of interruption in trade have been even more intense due to the US East Coast port strikes.

Around 14 ports around the US East Coast were affected by the 50,000 International Longshoremen Association members who went on an indefinite strike on Tuesday.

Marco Forgione, director general of the Chartered Institute of Export and International Trade, said that the invasion of Ukraine by Russia, the US-China trade dispute, and incidents like the collapse of the Baltimore bridge have put exceptional pressure on the fragile supply chain.

Due to these incidents, the cost of transporting goods has been impacted.

Businesses using the Cape of Good Hope route have a 40% increase in fuel costs and container prices.

When the market peaked in July, spot rates of 40-ft shipping containers traveling between East Asia and northern Europe were $8,587 per container, 468% more than in December 2023, before the Houthi attacks started.

The US port strikes have impacted container pricing, with the average price of a 40-ft container at $2,861, up from $1,836.

The interruption in the Red Sea led to more waiting periods for the companies.

Manufacturers and merchants claimed that delivery times had increased by four weeks due to the diversion around Africa to avoid the Red Sea.

Due to the disruption, Tesla and Volvo had to shut down production due to a parts shortage.

Retailers in the UK, such as JD Sports and DFS, have a sales decline due to the Red Sea situation.

Forgione predicted that if disruption persisted, consumers would eventually suffer.

How is the price of oil impacted?

On Wednesday, the oil price increased for the second day in a row, from $71 to $76 per barrel.

The market is preparing for a potential danger to Iran’s crude supply. They can produce a million barrels of oil a day. However, if issues with shipping lanes across the Red Sea impact petroleum shipments from the Middle East region, there may be supply disruptions.

In an unlikely event, Goldman Sachs warned that a disruption in the oil flow through the Persian Gulf’s Strait of Hormuz would cause an increase in oil prices.

Will inflation increase again?

In 2021, the price of petrol and oil started increasing, resulting in inflation going up by 10% and impacting the cost of groceries to home energy bills.

Over the past year, inflation has dropped to almost the Bank of England’s 2% objective, but prices are still more than 20% higher than before the pandemic.

The cost of EU imports has increased due to Brexit, and the US and China’s trade dispute might become a bigger tariff war.

The UK is still suffering from the effects of the pandemic and two major wars, which affected importers and exporters. Brits’ finances will suffer if they decide to pass the costs on to customers.

Source: short URL
Tags: global trademiddle eastSupply ChainsUSAWorkers Strike
The Global Economics

The Global Economics

Related Posts

Ukraine to Launch Starlink Mobile Internet Via Satellite in 2026
Infrastructure

Ukraine to Launch Starlink Mobile Internet Via Satellite in 2026

by The Global Economics
July 11, 2025
EU-US Talks to Lower US Import Tariffs to Protect the Auto Industry
Transportation

EU-US Talks to Lower US Import Tariffs to Protect the Auto Industry

by The Global Economics
July 10, 2025
Renewable Energy Companies In Danger Over Trump’s Excise Tax Bill
Energy

Renewable Energy Companies In Danger Over Trump’s Excise Tax Bill 

by The Global Economics
July 1, 2025
ABF Threatens To Shut Down Britain’s Biggest Bioethanol Plant After US-UK Deal
Industry

ABF Threatens To Shut Down Britain’s Biggest Bioethanol Plant After US-UK Deal 

by The Global Economics
June 27, 2025
Europe's Dream to Become Leader in Low-Carbon Cars Hampered by China
Clean Energy

Europe’s Dream to Become Leader in Low-Carbon Cars Hampered by China

by The Global Economics
June 23, 2025
Twitter Youtube LinkedIn Soundcloud
the global economics logo

The Global Economics Limited is a UK based financial publication and a Bi-Monthly business magazine giving thoughtful insights into the financial sectors on various industries across the world. Our highlight is the prestigious country specific Annual Global Economics awards program where the best performers in various financial sectors are identified worldwide and honoured.

DMCA.com Protection Status

  • Privacy
  • Legal
  • Terms of Use
  • Client’s Voice
  • Server Status

norton verified - the global economics

Latest Posts

Hong Kong's Asset Management Hits US$4.5 Trillion Milestone

Hong Kong’s Asset Management Hits US$4.5 Trillion Milestone

July 18, 2025
Egypt Strikes Gold as its Revenue Boosted by 131% to Over $446 Million Through Mineral Exploration Deals

Egypt Strikes Gold as its Revenue Boosted by 131% to Over $446 Million Through Mineral Exploration Deals

July 17, 2025
Indonesia Tightens Monitoring of "High Risks, High Return" China-Funded Projects

Indonesia Tightens Monitoring of “High Risks, High Return” China-Funded Projects

July 16, 2025
Download The Global Economics PWA to your mobile or Desktop
PWA App Download
Download The Global Economics Android App to your mobile or Desktop
Android App
Download The Global Economics IOS App to your mobile or Desktop
IOS App

All Rights Reserved © 2020 | 🇬🇧 The Global Economics, Business Finance Publication - www.theglobaleconomics.uk 🌏

Welcome Back!

Sign In with Facebook
Sign In with Linked In
OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Sign Up with Facebook
Sign Up with Linked In
OR

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • About us
  • Awards
  • Magazine
  • Client’s Voice
  • Exclusive Coverage
  • Nominate
  • Login
  • Sign Up

All Rights Reserved © 2020 | 🇬🇧 The Global Economics, Business Finance Publication - www.theglobaleconomics.uk 🌏

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Go to mobile version