The Red Sea crisis continues to affect international shipping.
Far from returning to normal, the situation continues to disrupt the main routes between Asia and Europe, forcing shipping companies to round Africa via the Cape of Good Hope.
This detour adds approximately 6,000 km and an average increase of 10 to 15 days in transit time.
According to recent data, 46% of Suez Canal traffic has been diverted, while traffic around the Cape has grown by 70%.
Direct implications
- Increased Total Cost of Ownership (TCO): higher fuel consumption and higher war risk premiums.
- Inventory pressure: longer lead times force companies to maintain safety stocks or advance shipments (frontloading).
- Regional impact: Mediterranean ports, especially Spanish ones, are experiencing cumulative delays of up to two weeks.
Recommendations from AGC
- Model the TCO using the Cape as the baseline scenario. Plan timelines and costs based on a more conservative reality.
- Review insurance policies. Ensure adequate coverage against war risks.
- Evaluate multimodal alternatives. The Dubai–Jeddah land bridge may be viable for critical cargo, although it involves additional costs and risks.
In a context of prolonged instability, planning based on realistic scenarios and maintaining operational flexibility is essential to ensure supply chain continuity.
