The Red Sea shipping disruption

In the medium term, one of the largest issues will be ships simply being in the wrong place. Supply chains have evolved to meet just-in-time strategies. This creates a delicate balance between each part of the supply chain, which is especially pressured between containers and ships.

Ports have limited berths, many of which are size specific, and limited physical space. Berths are booked months in advance to schedule appropriate port-side support for offloading, reloading, and refueling. The ground delivery of containers and other goods are scheduled around these berth bookings.

As ships reroute or take alternative routes, the delays create a knock-on effect at the ports. When ships do not arrive at their berths on time, containers and goods fill the ports waiting for onward shipment. By rerouting or anchoring vessels, not only are supply chains slowed, but availability of transport options from ports is disrupted. Rerouted ships can overwhelm alternative ports, leading to back-ups at berths and clogged passage in/out of the ports.

As during the covid pandemic, containers quickly pile up in ports due to delays in ship arrival. This is exacerbated as vessels are repeatedly rerouted or ordered to anchor in an attempt to wait out the risk.