WEEK 21 TOP 5: DISRUPTION TO SUPPLY CHAIN WATCHLIST No.187

- (Following No.186) The International Court of Justice (ICJ) issued on May 24 an order asking Israel to halt its military operations in Rafah and to open the land crossing for aid.

Islamic Resistance in Iraq declared on May 23 that its fighters fired a long-range al-Arqab upgraded cruise missile at a vital site in Haifa Port of Israel, although no confirmation by any other party. Yemen’s Houthis have launched attacks on the Yannis ship in the Red Sea, the Essex in the Mediterranean Sea, and MSC Alexandra in the Arabian Sea. While the US military’s Central Command (CENTCOM) only confirmed the Houthis launched two anti-ship ballistic missiles into the Red Sea and reported no injuries or damage to commercial ships.

Regarding the helicopter crash accident that resulted in the deaths of Iran's President and Foreign Minister, the General Staff of Iran's Armed Forces on May 23 released the first report on the causes showing no evidence of criminal activity, but investigators signal the probe is not yet over.

The Shanghai Containerized Freight Index (SCFI) continued to rise by 7.2% this week and has surged 16% to $4,072 per 40ft container, marking a 142% increase from the same week last year.

Disruption: It is possible that Israel will not comply with the ICJ order, which could lead to further actions from the ICJ and escalate protests. Additionally, the recent maritime attacks may continue to fuel fears in the market regarding cargo transport, pushing freight rates higher and potentially deteriorating the space issues.

- (Following No. 185) The vessel Dali that hit the Key Bridge in Baltimore US was refloated on May 20 and has since been towed to a nearby maritime terminal. Officials have indicated that the ship will likely stay at this terminal for approximately four to six weeks before being relocated to Norfolk for additional repairs.

With the Dali now out of the channel, deep-draft commercial vessels can once again navigate a section of the federal shipping channel that is 400 feet (121 meters) wide and 50 feet (15 meters) deep, facilitating access to and from the Port of Baltimore. The cleanup efforts will persist until the shipping channel is fully cleared and expanded back to its original width of 700 feet (213 meters) and all metallic debris is extracted from the riverbed.

Major shipping companies, including Maersk and MSC, have announced to resume some services and accept bookings for Baltimore.

Disruption: ocean transport to and from Baltimore resumes

- On the morning of May 23, China's Army announced the commencement of a two-day joint military exercise encircling the island of Taiwan, beginning at 7:45 AM local time. Named Joint Sword-2024A, these drills are intended as a severe reprimand against the separatist activities of the "Taiwan independence" forces and a firm warning against interference and provocations from external entities, according to a spokesperson from the Chinese Theater Command.

Despite these military activities, commercial shipping has not been significantly affected. Major container vessels from companies such as CMA, APL, and COSCO have been observed continuing to navigate through the Taiwan Strait and calling Fuzhou, Xiamen, and Kaohsiung ports according to their scheduled voyages on May 23 and 24.

Disruption: limited impact on ocean transport despite the heightened tension in the area

?

- South Africa will hold its general election on May 29, amid increased insecurity, water and energy crises, and recurring service delivery protests. The incumbent President, leader of the ruling African National Congress (ANC), and likely favorite, is running for a second consecutive mandate. If the ANC fails to secure 50%, it might be forced into a coalition with small opposition parties for the first time in its history. The former South African president's supporters have threatened to disrupt the May 29 elections with riots resembling the July 2021 mayhem when more than 300 people died. Meanwhile, increasing strikes or protests by trade unions and civil society organizations occur. Unionized truckers represented by the All Truck Drivers Forum and Allied South Africa (ATSD-ASA) called for their nationwide shutdown strike. Despite reassurances by ministers in the security cluster on May 23 that the strike had been called off, traffic on the N3 highway into the port city of Durban came to a standstill on May 24 as striking truck and minibus taxi drivers blocked the routes, as reported by a local radio station.

Disruption: possible disruption at the main highways, increasing security concerns on cargo integrity and delays

?

- Workers on the railways and airports in France walked out on May 21 to demand an “Olympic bonus” and an increase in staff in return for the enormous extra workload expected during the Olympic and Paralympic games in Paris, scheduled between July and September. Unionized air traffic control workers at Paris Orly Airport (ORY) in Paris, France, have planned a strike from May 25 to May 26.

Disruption: increasing protests and strikes in France, with possible labor shortages anticipated due to the upcoming Olympic and Paralympic Games, which may result in cargo delays