Reuters quotes Megan Paul on supply chain considerations coming out of tensions in the Red Sea
min readRecent attacks by Yemen's Houthi group on shipping vessels has led to disruption on global trade and prompted the establishment of a naval task force.
Tensions in the Red Sea have held up ship passages through the Suez Canal, which handles about 12% of worldwide trade. The Suez Canal is most vital to the movement of goods between Asia and Europe, but global logistics executives warned that sending ships on alternate routes could impact global supply chains, causing backups at ports and shortages of vessels, containers and equipment that are suddenly in the wrong place.
A number of shipping companies indiciated they would avoid the Red Sea following the attacks.
Megan Paul, Partner in the commercial team, explained to Reuters that the situation would alomst certainly have a significant impact on retailers and consumer goods firms, especially as the alternative shipping route proposed via the Cape of Good Hope is significantly longer (thereby raising insurance and transport costs). But, she explained, one silver lining might be the reslience of affected retailers:
Retailers have already started to move away from focusing solely on operational and logistical efficiency and speed, and have been focusing much more on operational resilience.
Read the full article, first appearing in Reuters, here.
