What does a blockade of the Red Sea mean for supply chains?

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By Patrick Lepperhoff, Principal at INVERTO and supply chain management expert.

We experienced what a blockade of the Red Sea means in spring 2021 when the Ever Given got stuck in the Suez Canal. Within a few days, a traffic jam of several hundred ships formed.

Although the canal was only blocked for six days at the time, the difficulties continued for several months afterwards: These six days permanently disrupted the precisely timed schedules of the ports in the Mediterranean and on the North Sea, so that the affected ships were first stuck in the Suez Canal and then at the port of destination and were consequently also unable to service their follow-up orders. In the short term, this further exacerbated the container shortage and freight rates remained at a high level.”

The first shipping companies have already instructed their captains to take the route around Africa, which is much longer, takes more time and increases costs.”

Companies waiting for goods from East Asia should consider alternative means of transportation - the costs may be higher, but a loss of production or empty shelves would be far more expensive.

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