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Globalization under attack

Two strategic points for global trade are in trouble. The #suezcanal has seen its daily volumes halved due to the #houthis attacks on vessels, while the #panamacanal has also seen volumes halved, in this case, for natural causes

as the water level needed to cross the canal has drop significantly, due to a severe drought, delaying crossings and increasing the costs. The alternative routs to these canals imply navigation around Africa and America, increasing the costs by around 30%. It is true that both issues should be temporary but there is not much that can be done to solve these problems, particularly in Panama. These costs increases have not filtered yet into inflationary measures, and many logistics executives and COOs are thinking about onshoring or near shoring manufacturing, because at some point the efficiency of these routes conflicts with its resiliency, making offshore manufacturing unreliable.


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