Disrupted supply chains are testing resilience and raising more questions
Insight
Warehousing strategies in focus amid Suez Canal disruption
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Recent attacks on ships in the Suez Canal are again pushing companies to revisit their longer-term logistics and warehousing strategies.
Ships unable to use the canal – through which around 12% of global trade and 30% of the world’s containers pass – have been waiting in safe locations, stuck at sea or forced to take longer routes. It’s the latest disruptive event in recent years to drive companies to look at their mitigation strategies.
“Long delays and higher costs are quickly becoming commonplace,” says Lisa Graham, Director of EMEA Industrial & Logistics Research & Strategy at JLL. “As goods face delays, companies are reviewing their inventory management strategies even further.”
The current scenario reiterates what many companies have been grappling with since the pandemic – and, indeed by the blocking of the Suez Canal in 2021, when a crashed container ship blocked the key trade route for six days.
“There’s been a growing realization that over-reliance on one route, region or country is unwise,” says Graham.
Ship use of the Suez Canal has fallen around 20% year-on-year, according to the International Monetary Fund’s PortWatch platform.
