WEEK #6 TOP 5: DISRUPTION TO SUPPLY CHAIN WATCHLIST No.224

- (Following No.223) On February 8, Israeli officials arrived in Doha for the second round of ceasefire negotiations. ?

The Egyptian government has rejected President Trump's suggestion to relocate Gazans to Egypt and Jordan, citing national security concerns. This stance was reported by AP on February 6.?

Regarding Syria, in an interview with the Washington Post, Syria's Interim Defense Minister?Qasra stated that Syria is open to allowing Russia to retain its air and naval bases in exchange for benefits to Syria.?

On the Iran front, the US President signed a National Security Presidential Memorandum (NSPM) on February 4, reinstating maximum pressure on Iran, including efforts with allies to reinstate international sanctions.?

With regards to the return to the Suez Canal transit, the Suez Canal Authority is encouraging shipping companies to consider signs of stabilizing conditions in the Red Sea when planning their routes. This follows the transit of the oil tanker CHRYSALIS through the Suez Canal on its first journey since being attacked last July, as reported on their website on February 3.??

Meanwhile, the US aircraft carrier Harry S. Truman recently moved from the Red Sea to the Mediterranean, docking at Souda Bay, Greece on February 6. Currently, the USS Stout and the USS Gettysburg are the only ships from the carrier strike group remaining in the Red Sea. This scaled-back naval presence signals a perceived decrease in regional threats. This also marks the third time in more than 15 months that the U.S. has left the Red Sea without an aircraft carrier. ?

In logistics, the Shanghai Containerized Freight Index (SCFI) fell by 7.3% this week, continuing its trend of?declining. Similarly, Drewry’s World Container Index dropped by 3% to $3,273 per 40ft container, especially rates from Rotterdam to New York decreased by 10%.

Drewry expected further slight decreases in spot rates due to increased capacity.??

Disruption:?the likely reinstatement of US sanctions against Iran, continued forecast of rerouting around the Cape through H1 2025

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- (Following No. 223) On February 1, the U.S. imposed a 25% tariff on imports from Canada and Mexico and a 10% tariff on Canadian energy products, citing concerns over illegal immigration and fentanyl trafficking. These tariffs were suspended until March 4 by a subsequent order on February 3 to allow for a reassessment of these threats. During this pause, Canada and Mexico committed to bolstering border security and anti-trafficking measures.?

Separately, a 10% tariff on goods from China and Hong Kong, effective February 4, was announced. However, the application of a 10% tariff on de minimis eligible goods was halted as per a February 5 Executive Order until proper tariff collection systems are established.?

In response, on February 4, China declared tariffs on specific U.S. imports starting February 10, including a 15% tariff on coal and LNG, and 10% on crude oil and certain vehicles and machinery.

Additionally, China implemented immediate export controls on elements like tungsten and molybdenum.?

Disruption: increase landing costs for Chinese imports in the U.S., potential congestion at U.S. ports and airports due to new tariff implementation?

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-? After an altercation involving a trailer driver and DC park security near Chittagong Port on February 4, all trailer movements were halted. This incident sparked a strike and road blockade by workers at Faujdarhat's DC Park in Sitakunda upazila, severely disrupting the transport of goods.

Despite union leaders ending the strike on February 6 following negotiations, disruptions continued as drivers maintained the blockade. The strike officially ended on the night of February 7 after further discussions, as reported by local media.?

Disruption: The recent three-day strike extended vessel waiting times and caused significant cargo delays at Chittagong Port?

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- Following a fatal accident at the Port of Genoa in Italy on February 5, unionized workers initiated a city-wide strike on February 6, demanding improved safety standards. ?

This strike mirrors a similar 24-hour work stoppage that occurred on December 16, 2024, also in response to a fatal incident the day prior. ?

Recent strikes, compounded by adverse weather in the Ligurian region, have significantly disrupted operations at the port. As per GoComet February 7 data, vessel waiting times at Genoa Port have increased to up to 8 days.?

Disruption:?expect continued cargo delays and potential further disruptions?

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- On February 4, the EU's climate policy head said that the European Commission is considering scaling back its Carbon Border Adjustment Mechanism (CBAM) to cover only 20% of companies, which are responsible for nearly all emissions in the scheme. ?

Set for full implementation in 2026, CBAM will levy charges on CO2 emissions from imported goods like iron, steel, and cement. Concerns about CBAM's complexity and its administrative burden were highlighted after a trial in Germany and Sweden showed low compliance.?

Disruption: potential regulatory adjustments to exempt most?businesses with small emissions from the CBAM requirements?