WEEK #7 TOP 5: DISRUPTION TO SUPPLY CHAIN WATCHLIST No.225

- (Following No.223)?On February 14, US President Trump advocated taking a “hard stance” on Gaza, the Palestinian enclave for which he has proposed a US takeover. Trump had earlier stated on February 10 that Hamas must release all Israeli hostages in Gaza by midday on February 15, or else “let hell break out.”?

On February 13, a Houthi leader warned that if Israel and the US proceed with President Trump’s plan to expel Palestinians from Gaza, the Houthis would respond with “military force.”?

Senior Hamas official Hamdan announced on February 14 that negotiations for the second phase of the Israel-Hamas ceasefire-hostage agreement would begin on February 17, provided Israel does not delay the delivery of humanitarian aid and heavy equipment to the Gaza Strip. The Israeli government has yet to confirm whether it will send a delegation to the talks.?

Meanwhile, the Suez Canal Authority chief Rabie expressed optimism that traffic through the Egyptian waterway would gradually return to normal by late March and fully recover by mid-year, assuming the Gaza ceasefire holds.?

In logistics, the Shanghai Containerized Freight Index (SCFI) fell by another 7.3% this week. Drewry’s World Container Index also decreased by 5% to $3,095 per 40ft container, with major declines in rates from Shanghai to Rotterdam (down 8%) and Shanghai to Los Angeles (down 7%).

Drewry anticipates further declines in spot rates in the coming weeks due to reduced demand following the Chinese New Year holidays.?

Disruption:?continued forecast of rerouting around the Cape through H1 2025?

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- (Following No. 222) On February 9, strike actions were initiated by the unions at Hutchison Ports Delta II in Rotterdam, Netherlands, due to Hutchison’s failure to provide a financial guarantee for the agreed-upon employment guarantee, including associated severance payments—a critical component of the negotiation results.?

Despite the terminal resumed operations on February 10,?no resolution on the employment guarantee has been reached. ?

Shipping lines have reported a slowdown in operations at Hutchison Ports Delta II for an undetermined period on?February 11. Additionally, on February 13, port operations were suspended for 4 hours, further impacting productivity.?

Disruption: vessel schedule changes for those calling at Hutchison Delta II, potential congestion, and delays. ?

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- (Following No. 224) On February 10, the US White House announced adjustments to steel import policies, effective March 12. The changes include terminating previous exemptions and agreements and applying a 25% ad valorem tariff on all steel articles under HTSUS heading 9903.80.01.?

The affected countries include Argentina, Australia, Brazil, Canada, EU member states, Japan, Mexico, South Korea, and the United Kingdom.?

On February 13, 2025, the US White House announced the "Fair and Reciprocal Plan," aimed at overhauling US trade relationships by imposing tariffs that match those levied by other countries on American goods. The memorandum directs the Director of the Office of Management and Budget to assess the fiscal impacts within 180 days of the signing date (February 13, 2025), setting the assessment deadline for August 12, 2025. Despite this, news outlets have reported that President Trump has instructed his economic team to develop plans for reciprocal tariffs, with comprehensive trade policy reports expected by April 1, 2025.?

The plan involves imposing tariffs on imports from countries that currently tax US goods, effectively mirroring their tariff rates. The affected countries/regions could include the EU, India, China, Japan, and Brazil.?

Disruption: higher landing cost for imports to US?

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- A nationwide strike occurred in Belgium on February 13, led by three major trade unions protesting proposed pension reforms. As a result, all Belgian airports were closed, and rail services were severely limited across the country. While port terminal operations were not directly impacted, GoComet data as of February 14 indicates that vessel dwell times at the Port of Antwerp have increased to 3 days for imports and 7 days for exports.?

The unions have announced plans to strike on the 13th of every month until further notice. A similar strike on January 13 caused significant disruptions to flights and train services.?

Disruption: congestion at the Port of Antwerp, with further strikes expected to impact airfreight and rail services in Belgium.??

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- Comprehensive warning strikes were called by the Ver.di union across Germany, with thousands of employees from various sectors participating to pressure employers for long-overdue wage negotiations. The strikes began in Frankfurt on February 12, followed by Hamburg on February 13, and later in Berlin.

Workers from the transport sector, including flight handling, rail services, and pilot transfer services at ports, participated in the strikes, disrupting operations at ports, airports, and rail networks. According to GoComet data as of February 14, vessel dwell times at the Port of Hamburg have increased to 3 days for imports and 7 days for exports.?

Disruption: further strikes are likely, congestions at Hamburg port?

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