{"id":7604,"date":"2024-09-09T16:33:10","date_gmt":"2024-09-09T08:33:10","guid":{"rendered":"https:\/\/blog.ninjavan.co\/en-my\/?p=7604"},"modified":"2025-01-08T14:31:42","modified_gmt":"2025-01-08T06:31:42","slug":"xb-nf-how-the-red-sea-crisis-is-rocking-the-supply-chain-world","status":"publish","type":"post","link":"https:\/\/blog.ninjavan.co\/en-my\/xb-nf-how-the-red-sea-crisis-is-rocking-the-supply-chain-world\/","title":{"rendered":"How the Red Sea Crisis is Rocking the Supply Chain World"},"content":{"rendered":"\n

The Red Sea Crisis has recently become a significant concern, especially affecting global supply chains. This article explores the crisis’s impacts and how businesses can navigate these challenges.<\/p>\n\n\n\n

The Red Sea Crisis Explained<\/strong><\/h2>\n\n\n\n

The Red Sea Attack<\/a> is all about geopolitical tensions and conflicts in the Red Sea region, particularly involving countries like Yemen, Saudi Arabia, and Eritrea. These conflicts are messing with key maritime routes essential for global trade. The Red Sea connects the Mediterranean Sea via the Suez Canal to the Indian Ocean, making it a vital trade route.<\/p>\n\n\n\n

\"Red<\/figure>\n\n\n\n

Since mid-November 2023, Houthi rebels have ramped up attacks on commercial ships in the Red Sea. As a result, major shipping companies are avoiding the Red Sea and the Suez Canal, 0leading to a significant shift in shipping activities. The Red Sea is crucial for global trade, with one-third of container traffic and 12% of seaborne oil<\/a> passing through it. Now, many vessels are taking the longer route around the southern part of Africa, which adds about $1 million in fuel costs per round trip.<\/p>\n\n\n\n

Container ship transits in the Red Sea have dropped by 67%<\/a>, and liquefied natural gas (LNG) carriers have completely stopped since January 2024. This rerouting has spiked shipping costs. For instance, shipping costs<\/a> from Shanghai to Europe have more than tripled since early December 2023. The cost for a container traveling from Shanghai to Rotterdam has jumped by 158% over the past year<\/a>, reaching $4,426. Plus, consumer goods<\/a> in Southeast Asia are getting pricier as shipments reroute via the Cape of Good Hope.<\/p>\n\n\n\n

Why Asia\u2019s Supply Chains are Feeling the Heat<\/strong><\/h2>\n\n\n\n

The disruptions in the Red Sea are causing a domino effect on Asia’s logistics and supply chains. About 40% of Asia-Europe trade<\/a> usually goes through the Red Sea. Now, higher shipping costs and delays are affecting the entire supply chain, leading to higher consumer prices and potential inflation.<\/p>\n\n\n\n

The disruptions caused by the Red Sea Crisis have significantly impacted Asia\u2019s supply chains. Here are some key effects:<\/p>\n\n\n\n