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The Advertiser
07-07-2025
- Business
- The Advertiser
The global supply chain is more fragile than you think. That comes at a cost
While recent tensions in the Middle East were a fresh reminder of how quickly geopolitical conflicts can escalate, they also cast a renewed spotlight on the fragility of the global supply chain and just how reliant the shipping industry is on a handful of key trade corridors. It's likely that until last week, most Australians had no idea where the Strait of Hormuz was located, nor realised its crucial role in the transportation of the world's oil. The Strait is the only sea passage for oil and gas shipments out of the Persian Gulf, moving an estimated 20 million barrels of oil daily, and threats to close it triggered significant global concern. While the closure didn't come to fruition, it was yet another reminder of the vulnerabilities that exist within the global supply chain, and the severe disruption that can result from just one incident. It's a situation we've seen play out in the past. In 2021, the container ship Ever Given blocked the Suez Canal for six days, holding up billions of dollars' worth of goods and causing global shipping congestion, delays and container shortages that took months to fully resolve. Other significant routes include the Strait of Malacca, Panama Canal and Strait of Singapore, where a major disruption would have significant global ramifications. Australia is particularly vulnerable due to our heavy reliance on imported goods and the fact that we remain a relatively small player in terms of global trade. Routes to Australia are often not as lucrative or as high a priority for the shipping lines as routes to and from Europe and the US, for example. Experience tells us that when all aspects of the supply chain are operating smoothly, global shipping is generally a fast and efficient process. However, efficiency and productivity within the industry has arguably been maximised to such a point that there is no longer any room for error or disruption. Advances in technology mean schedules and estimated delivery times are now monitored to the minute, operating on a best-case scenario that requires all elements to be functioning correctly and as expected. These efficiencies have been driven both by industry and the consumer, with global connectivity and the instant-gratification nature of our increasingly digital world raising expectations when it comes to delivery and shipment times. It means that when disruption hits the supply chain - whether that be geopolitical tension, a significant weather event or another unforeseen incident - the knock-on effect is often far more widespread, with the economic and social impacts lingering for weeks or months after the initial issue is resolved. Unfortunately, the next disruption is a matter of when and not if. But, by understanding the interconnected nature of the global supply chain, and expecting the unexpected, industry stakeholders hope to mitigate potential impacts and avoid pandemic-style pictures of empty shelves in the future. While recent tensions in the Middle East were a fresh reminder of how quickly geopolitical conflicts can escalate, they also cast a renewed spotlight on the fragility of the global supply chain and just how reliant the shipping industry is on a handful of key trade corridors. It's likely that until last week, most Australians had no idea where the Strait of Hormuz was located, nor realised its crucial role in the transportation of the world's oil. The Strait is the only sea passage for oil and gas shipments out of the Persian Gulf, moving an estimated 20 million barrels of oil daily, and threats to close it triggered significant global concern. While the closure didn't come to fruition, it was yet another reminder of the vulnerabilities that exist within the global supply chain, and the severe disruption that can result from just one incident. It's a situation we've seen play out in the past. In 2021, the container ship Ever Given blocked the Suez Canal for six days, holding up billions of dollars' worth of goods and causing global shipping congestion, delays and container shortages that took months to fully resolve. Other significant routes include the Strait of Malacca, Panama Canal and Strait of Singapore, where a major disruption would have significant global ramifications. Australia is particularly vulnerable due to our heavy reliance on imported goods and the fact that we remain a relatively small player in terms of global trade. Routes to Australia are often not as lucrative or as high a priority for the shipping lines as routes to and from Europe and the US, for example. Experience tells us that when all aspects of the supply chain are operating smoothly, global shipping is generally a fast and efficient process. However, efficiency and productivity within the industry has arguably been maximised to such a point that there is no longer any room for error or disruption. Advances in technology mean schedules and estimated delivery times are now monitored to the minute, operating on a best-case scenario that requires all elements to be functioning correctly and as expected. These efficiencies have been driven both by industry and the consumer, with global connectivity and the instant-gratification nature of our increasingly digital world raising expectations when it comes to delivery and shipment times. It means that when disruption hits the supply chain - whether that be geopolitical tension, a significant weather event or another unforeseen incident - the knock-on effect is often far more widespread, with the economic and social impacts lingering for weeks or months after the initial issue is resolved. Unfortunately, the next disruption is a matter of when and not if. But, by understanding the interconnected nature of the global supply chain, and expecting the unexpected, industry stakeholders hope to mitigate potential impacts and avoid pandemic-style pictures of empty shelves in the future. While recent tensions in the Middle East were a fresh reminder of how quickly geopolitical conflicts can escalate, they also cast a renewed spotlight on the fragility of the global supply chain and just how reliant the shipping industry is on a handful of key trade corridors. It's likely that until last week, most Australians had no idea where the Strait of Hormuz was located, nor realised its crucial role in the transportation of the world's oil. The Strait is the only sea passage for oil and gas shipments out of the Persian Gulf, moving an estimated 20 million barrels of oil daily, and threats to close it triggered significant global concern. While the closure didn't come to fruition, it was yet another reminder of the vulnerabilities that exist within the global supply chain, and the severe disruption that can result from just one incident. It's a situation we've seen play out in the past. In 2021, the container ship Ever Given blocked the Suez Canal for six days, holding up billions of dollars' worth of goods and causing global shipping congestion, delays and container shortages that took months to fully resolve. Other significant routes include the Strait of Malacca, Panama Canal and Strait of Singapore, where a major disruption would have significant global ramifications. Australia is particularly vulnerable due to our heavy reliance on imported goods and the fact that we remain a relatively small player in terms of global trade. Routes to Australia are often not as lucrative or as high a priority for the shipping lines as routes to and from Europe and the US, for example. Experience tells us that when all aspects of the supply chain are operating smoothly, global shipping is generally a fast and efficient process. However, efficiency and productivity within the industry has arguably been maximised to such a point that there is no longer any room for error or disruption. Advances in technology mean schedules and estimated delivery times are now monitored to the minute, operating on a best-case scenario that requires all elements to be functioning correctly and as expected. These efficiencies have been driven both by industry and the consumer, with global connectivity and the instant-gratification nature of our increasingly digital world raising expectations when it comes to delivery and shipment times. It means that when disruption hits the supply chain - whether that be geopolitical tension, a significant weather event or another unforeseen incident - the knock-on effect is often far more widespread, with the economic and social impacts lingering for weeks or months after the initial issue is resolved. Unfortunately, the next disruption is a matter of when and not if. But, by understanding the interconnected nature of the global supply chain, and expecting the unexpected, industry stakeholders hope to mitigate potential impacts and avoid pandemic-style pictures of empty shelves in the future. While recent tensions in the Middle East were a fresh reminder of how quickly geopolitical conflicts can escalate, they also cast a renewed spotlight on the fragility of the global supply chain and just how reliant the shipping industry is on a handful of key trade corridors. It's likely that until last week, most Australians had no idea where the Strait of Hormuz was located, nor realised its crucial role in the transportation of the world's oil. The Strait is the only sea passage for oil and gas shipments out of the Persian Gulf, moving an estimated 20 million barrels of oil daily, and threats to close it triggered significant global concern. While the closure didn't come to fruition, it was yet another reminder of the vulnerabilities that exist within the global supply chain, and the severe disruption that can result from just one incident. It's a situation we've seen play out in the past. In 2021, the container ship Ever Given blocked the Suez Canal for six days, holding up billions of dollars' worth of goods and causing global shipping congestion, delays and container shortages that took months to fully resolve. Other significant routes include the Strait of Malacca, Panama Canal and Strait of Singapore, where a major disruption would have significant global ramifications. Australia is particularly vulnerable due to our heavy reliance on imported goods and the fact that we remain a relatively small player in terms of global trade. Routes to Australia are often not as lucrative or as high a priority for the shipping lines as routes to and from Europe and the US, for example. Experience tells us that when all aspects of the supply chain are operating smoothly, global shipping is generally a fast and efficient process. However, efficiency and productivity within the industry has arguably been maximised to such a point that there is no longer any room for error or disruption. Advances in technology mean schedules and estimated delivery times are now monitored to the minute, operating on a best-case scenario that requires all elements to be functioning correctly and as expected. These efficiencies have been driven both by industry and the consumer, with global connectivity and the instant-gratification nature of our increasingly digital world raising expectations when it comes to delivery and shipment times. It means that when disruption hits the supply chain - whether that be geopolitical tension, a significant weather event or another unforeseen incident - the knock-on effect is often far more widespread, with the economic and social impacts lingering for weeks or months after the initial issue is resolved. Unfortunately, the next disruption is a matter of when and not if. But, by understanding the interconnected nature of the global supply chain, and expecting the unexpected, industry stakeholders hope to mitigate potential impacts and avoid pandemic-style pictures of empty shelves in the future.
New Straits Times
07-07-2025
- Business
- New Straits Times
Geoeconomics of trade: Djibouti, the Suez Canal, and the business logic of geography
Introduction: When the Map Shapes the Mandate In global affairs, maps do more than illustrate borders—they reveal strategic imperatives. A country's geography is not simply its physical terrain; it is the architecture of its constraints, its possibilities, and its vulnerabilities. While resources, institutions, and leadership matter, geography imposes structural conditions that no policymaker can escape. The truism "Geography is destiny" is not deterministic—but it is profoundly instructive. Geography Is Destiny: From Slogans to Strategy The phrase, often attributed to Napoleon and echoed by thinkers from Halford Mackinder to Robert Kaplan, encapsulates how natural features—mountains, rivers, chokepoints, deserts—can shape a nation's developmental path and geopolitical weight. Geography defines what a country must defend, who it must trade with, and how it might project power. In essence, geography offers both opportunity and entrapment. Two case studies—Djibouti and the Suez Canal—offer sharp illustrations of this truth. They are not economic superpowers in themselves, but they sit astride arteries through which the lifeblood of global trade flows. Their strategic value is not what they produce, but where they are. Djibouti: Geography as Leverage Djibouti, a small nation on the Horn of Africa, lacks arable land, natural resources, and a large domestic market. And yet, it punches far above its weight on the global stage. Why? Because it commands the Bab el-Mandeb Strait—a chokepoint that connects the Red Sea to the Gulf of Aden, through which roughly 10 per cent of global seaborne trade passes. More importantly, it serves as the maritime gateway between Europe and Asia, particularly for oil shipments and container cargo. This geographical positioning has transformed Djibouti into a global military hub, hosting bases for the U.S., France, China, and others. Each is vying for influence over this narrow corridor. Djibouti has used this to extract rents, attract foreign investment, and enhance its geopolitical relevance. It is geography turned into strategy. The Suez Canal: Control the Chokepoint, Shape the Century The Suez Canal is another potent example. Artificial, yes—but geopolitical in the extreme. Completed in 1869, the canal sliced through Egypt to link the Mediterranean and Red Seas, radically reducing travel time between Europe and Asia. Control over Suez has repeatedly shifted the global power balance: • In 1956, Egypt's nationalization of the canal by President Nasser triggered the Suez Crisis, a turning point in the decline of British and French imperial influence. • In 2021, the blockage of the canal by the Ever Given container ship—a black swan logistical event—froze $9 billion worth of trade per day, underscoring the fragility and significance of chokepoints in the modern economy. The Suez Canal does not merely move ships. It moves empires, markets, and military doctrines. Geopolitics: When Geography Meets Power Geopolitics is the study of how geography informs the behavior of states. It explains why Russia fears encirclement, why the U.S. prioritizes naval supremacy, and why China builds artificial islands in the South China Sea. Geography, in this context, is the stage upon which states act, and geopolitics is the script they follow in pursuit of survival, status, and security. Djibouti and Suez are prime examples of how static features—location, proximity, terrain—can make a place valuable, vulnerable, or volatile. Black Swan Events, Geopolitics & Geoeconomics: Fragility in the Fault Lines Black swan events—rare, unpredictable shocks—often expose the latent geopolitical and geoeconomic dependencies created by geography. The Ever Given was one such event. So was the COVID-19 pandemic, which revealed just how vulnerable the world's supply chains are to localized disruptions. The Suez Canal and the Bab el-Mandeb Strait are not just maritime shortcuts. They are single points of failure. A naval standoff, a pirate attack, a natural disaster—any one of these could ricochet across global markets in hours. Thus, geographic chokepoints become economic pressure points. In an age of interconnected commerce, geopolitics and geoeconomics have merged. Who controls the strait can influence shipping rates, insurance premiums,and commodity prices. The geography is permanent—but the shocks are episodic, and they test a state's resilience. Geostrategy and Geoeconomics: From Presence to Power Projection Geostrategy is how a nation translates its geography into power—militarily, diplomatically, and economically. It is not enough to possess a strategic location; one must know how to leverage it. • Djibouti has pursued a rentier geostrategy—offering land and logistics for global powers while investing in port infrastructure. • Egypt, under successive regimes, has used the Suez Canal as a fiscal lifeline, generating billions in toll revenue, while aligning itself with the interests of major powers to maintain canal security. Geoeconomics complements this by turning geography into a commercial and strategic asset. Both Djibouti and Egypt seek to monetize their location—through logistics, trade facilitation, and foreign investment. But this comes with dependency risks: the same foreign presence that brings stability can also invite entanglement. Today, the geoeconomic toolkit includes not only toll revenue or basing rights, but also: • Foreign debt diplomacy (as seen in Chinese Belt and Road projects), • Competing logistics corridors (like the India–Middle East–Europe Economic Corridor vs. China's BRI), • And regional port competition (e.g., between Port Sudan, Berbera, and Djibouti itself). These instruments allow states to amplify the value of geography into policy leverage and economic influence—turning location into strategy, and infrastructure into influence. History and Geography: A Feedback Loop in Geopolitics History is not just context—it is an amplifier. Past events shape the strategic imagination of nations. Egypt's experience with colonial exploitation, followed by the nationalization of the Suez Canal, still informs its statecraft. Djibouti's colonial legacy and post-independence struggle for relevance explain its current foreign base diplomacy. Historical memory guides current alliances, threat perceptions, and even public sentiment. In geopolitics, the past doesn't just echo—it instructs. Conclusion: The Compass and the Clock To understand a nation's place in the world, you must look at both the compass and the clock—its geography and its history. Geography imposes structure; history provides narrative. Together, they shape geopolitics, condition geostrategy, and expose the world to black swan risks with outsize consequences. Djibouti and the Suez Canal are reminders that small places can have oversized impacts—not because of what they are, but because of where they are. Geography is not just destiny. It is design—and in the hands of those who understand it, it becomes destiny by design. ———————————————————— Economist Samirul Ariff Othman is an adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and a senior consultant with Global Asia Consulting. The views in this OpEd piece are entirely his own.
Time of India
11-06-2025
- Politics
- Time of India
Container shipping needs a new global liability regime
MUMBAI: India must push for a new global regime to govern container shipping liability, safety, and environmental protection in line with evolving maritime risks, a government official has said after two back-to-back incidents involving container ships off the coast of Kerala in a fortnight raise alarm bells. 'The two incidents bring into sharp focus the broader regulatory blind spot surrounding container shipping, which, unlike oil tankers, remains outside the purview of comprehensive global liability frameworks - despite the environmental and infrastructural risks they now regularly present,' the official said. 'Container ships like ' MSC ELSA-3' and ' Wan Hai 503 ' are not covered under compensation regimes equivalent to those for oil tankers, despite carrying hazardous cargo and posing major risks. High-profile incidents such as the 'Ever Given' (Suez Canal) and 'DALI' (Baltimore bridge collapse in the U.S.) underscore the need for a dedicated international liability regime for container shipping,' the official said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo An explosion in one of the cargo containers on Monday triggered a fire that continues to rage, engulfing the Singapore-flagged container ship 'Wan Hai 503', about 44 nautical miles off the coast of Azhikkal in Kerala. While the Indian Coast Guard ships are at the site making valiant efforts to douse the fire, the stricken ship owned by Taiwan's Wan Hai Lines, has started to list (tilt) to one side, with many fearing that the ship may sink, raising the spectre of an environmental hazard due to the presence of dangerous cargo in some of the containers. Live Events Already an unspecified number of containers have fallen overboard following the explosion and fire. 'This isn't just a shipping disaster,' says ex-mariner Sandeep Maurya. 'It's a loud alarm for the entire shipping industry,' he noted. The mishap demands rethinking cargo handling for extreme climates, investing in fail-safe refrigeration and monitoring for hazardous goods and strengthening global safety protocols for dangerous materials at sea. 'The lives of seafarers and the integrity of the global supply chain depend on it,' Maurya added. On May 25, the Liberian-flagged container ship 'MSC ELSA 3', was en route to Kochi from Vizhinjam, carrying over 640 containers, including at least 12 containing hazardous cargo such as calcium carbide, when it capsized and sank off the coast of Kochi.
Scoop
22-05-2025
- Business
- Scoop
90 Days To Economic Collapse: UN And Experts Sound Alarm Over Security At Sea
20 May 2025 Addressing a high-level debate of the Security Council, António Guterres said that oceans and seas are 'sending a clear SOS,' as maritime spaces face escalating pressure from both traditional threats and new dangers – including piracy, armed robbery, trafficking, terrorism, cyberattacks and territorial disputes. 'From time immemorial, maritime routes have bound the world together,' he said. 'But maritime spaces are increasingly under strain…and without maritime security, there can be no global security. ' Spike in piracy, attacks The Secretary-General pointed to a sharp spike in piracy and armed robbery at sea in early 2025, citing International Maritime Organization(IMO) figures showing a 47.5 per cent increase in reported incidents compared to the same period last year. The rise was most pronounced in Asia, especially in the busy Straits of Malacca and Singapore. He also highlighted continued attacks on shipping in the Red Sea and Gulf of Aden by Houthi the Gulf of Guinea, the Mediterranean and the Atlantic. The debate was a signature event of the Greek presidency of the Council. Prime Minister Kyriakos Mitsotakis held the gavel, and several ministers were in the chamber. A 90-day countdown to collapse Melina Travlos, President of the Union of Greek Shipowners, delivered a stark warning to Council members: if the global shipping system grinds to a halt, the world economy will collapse in just 90 days. She described shipping as 'the silent guardian of global welfare,' noting that 90 per cent of international trade and more than 12 billion tonnes of goods depend on maritime transport each year. ' Shipping unites the world, not occasionally, but consistently, ' she said, calling for greater protection of seafarers and maritime infrastructure amid increasing and more complex threats. One ship, six days, billions lost Christian Bueger, a professor of international relations at the University of Copenhagen, reminded ambassadors that in 2021, a single ship – the Ever Given – blocked the Suez Canal for six days, costing the global economy billions. ' Never before in history have we been as dependent on the sea as we are today, ' he said, citing a 300 per cent rise in maritime trade since the 1990s. Mr. Bueger urged Member States to adopt a more systematic, evidence-based approach to maritime security, urging a global response that is as interconnected as the threats it faces. Uphold law of the sea In his remarks, Secretary-General Guterres laid out a three-pronged strategy to strengthen maritime security – highlighting that decisive, coordinated global action is needed regardless of individual flashpoints or shipping disruptions. These include upholding international law, tackling the root causes of maritime insecurity, and strengthening global partnerships. He called on all nations to uphold international law, especially the UN Convention on the Law of the Sea (UNCLOS), the international treaty that sets the legal framework for all maritime activities and regulates the use of ocean and its resources. ' This framework is only as strong as States' commitment to full and effective implementation, ' he said. 'All States must live up to their obligations.' Prioritise investment On root causes, he urged investment in coastal communities, judicial reform and building maritime capacity in developing countries — from surveillance to port security. Alongside this, weak governance, rising poverty and lack of opportunities must be addressed. The UN chief stressed that lasting solutions would require cooperation from governments, regional bodies, the private sector and civil society – including women and girls, who are disproportionately affected by maritime crime. ' Collectively, we must do more to reduce the likelihood that desperate people will turn to crime and other activities that threaten maritime security and degrade our ocean environment, ' he said. 'The United Nations system stands ready to support Member States to ensure peaceful, secure, and prosperous maritime spaces for generations to come.'
Yahoo
24-03-2025
- General
- Yahoo
Happy Fourth Anniversary Of Big Boat Stuck To Those Who Celebrate
On March 23, 2021, the world awoke to an unfolding drama that would captivate and unite it as few things in history ever had: Big Boat Stuck. MV Ever Given, a 400 meter long Golden-class container ship owned by Taiwanese shipping company Evergreen Marine Corporation, had run aground in the Suez Canal and blocked a non-insignificant percentage of world trade. What followed was a solid few months of memes, laughs, natsec think pieces, and wall-to-wall big boat coverage here on Jalopnik. Today, we're gonna look back on that time, a better time, when smart alecks from around the world came together to laugh at a big boat stuck. The fifth ship in a northbound convoy, Ever Given set sail early on the morning of the 23rd with no tug escort to transit the Suez Canal — the link between the Red Sea and the Mediterranean Sea — on her way to Rotterdam, NL. At around 07:42 local time, Ever Given was engulfed in a nasty sandstorm near the village of Manshiyet Rugola. With winds exceeding 40 knots (46 miles per hour) and no tug to keep her on track, the massive vessel was immediately blown off course. Her bow ran into the canal's eastern shore at a speed of 13 knots (roughly 15 miles per hour), her stern swung around and wedged into the western shore while still under power, and all of a sudden she was stuck tight. That, as they say, is when hilarity ensued. Read more: All Aboard South Korea's New $100 Billion Baby-Making Trains At the spot where Ever Given ran aground, the Suez Canal is around 200 meters across, so a fully loaded, 400-meter-long container ship wedged hard diagonally across the canal immediately presented some navigation issues. She was completely blocking the canal, as 300 ships at both ends were attempting to transit. To call the situation a nightmare (as well as an all-hands emergency) was an understatement. The Suez Canal Authority closed the canal to shipping on March 25 as salvage and recovery teams descended on the stuck vessel in an attempt to get her free. Over the course of about a week, a crack team of experts, 18 tugs, and the dredger Mashhour worked feverishly to pull Ever Green out of the mud while international shipping slowly ground to a halt on either side of the canal. A huge traffic jam of more than 400 ships slowly formed in the Med, the Red Sea, and the Bitter Lakes as Ever Given was painstakingly salvaged. On March 29 at around 04:30 local time, Ever Given's stern was floated. Her bow was floated soon after, and she was finally free. This wasn't the end of Ever Given's ordeal, however. She was towed to the Great Bitter Lake to be inspected for damage while the canal was open, then immediately impounded and her crew interrogated. Accusations were made, blame was thrown freely around, and on April 13, 2021, she was seized by a court at the urging of the SCA pending payment of more than $900 million American dollars. That price included, among other things, the cost of the salvage effort and around $300 million for SCA for "loss of reputation". The week that Ever Given spent gumming up international shipping revealed some serious worldwide economic issues. The ongoing Covid pandemic had already highlighted problems with supply chain resilience, and the Ever Given debacle really shined a light on both that and the weaknesses of just-in-time manufacturing. Lloyd's List estimated that the cost of the goods delayed by the blockage was a staggering $400 million per hour as bulk freighters, tankers, and container ships waited at anchor for Ever Given to be refloated. The knock-on effects of the blockage were even worse, and prices of everything from oil and food to kids toys and computer chips rose significantly and stayed there for months afterwards. It wasn't all bad, though. There were, of course, the memes. Internet wags immediately got to work plastering pithy messages over images of Ever Given and her various rescuers. One particularly popular one was a photo of a seemingly tiny excavator pushing Ever Given with its boom arm (that one was my favorite, in fact). There were also Google doodles, a marine tracker built specifically to track Ever Given's adventures around the world, and Microsoft Flight Simulator mods. The event even got a shout out in an episode of "What We Do in the Shadows" when it was revealed that Nandor was delayed because he was stuck in a container aboard Ever Given. Since then, while we've had many good boats stuck here and there, nothing has really captured the world's imagination like Ever Given's plight. Despite the very real economic, legal, and political ramifications of the incident, it was also extremely funny, and we all needed a laugh at the time. At the time of this writing, Ever Given is in port at Port Klang, Malaysia and seems to be healthy and happy with a well-founded crew. So, today, let's raise a glass to Ever Given and her crew and wish them fair winds and following seas. Oh, and captain, watch out for those sandstorms. Want more like this? Join the Jalopnik newsletter to get the latest auto news sent straight to your inbox... Read the original article on Jalopnik.
