Supply chain wobbles are back. Just as the effects of pandemic-era backlogs and port closures have unwound, two continental shipping passages, the Suez and Panama canals, are suffering from obstructions to trade traffic. Unlike the past few festive seasons, there is less concern about any delays spoiling Christmas. Most toy and food stocks have already been built up ahead of the latest blockages. The problems have however introduced a new risk for the global economy in 2024.
Around 12 per cent of global trade passes through the Red Sea, which is bookended by the Suez Canal to the north and the Bab-el-Mandeb strait — known as the Gate of Tears — to the south. Since mid-November more than 10 transiting vessels have been attacked by Yemen’s Iran-aligned Houthi militants. Many shipping companies have responded by postponing journeys through the region — a crucial passage between Asia and Europe. Oil company BP announced on Monday that it had paused shipments through the strait, citing a “deteriorating security situation”.