Overview
Global supply chains and international trade are currently influenced by a combination of geopolitical crises, regulatory changes, and persistent material shortages. Key events in the Red Sea, Ukraine, and the Panama Canal are significantly impacting trade routes, increasing costs, and creating new challenges for global commerce.
Key Events and Their Impacts
Red Sea Shipping Crisis:
Cause: Houthi rebel attacks on cargo ships.
Impact: Significant disruptions in the Suez Canal, which handles 30% of global container trade. Ships are rerouting around the Cape of Good Hope, adding approximately 4,000 miles to journeys and significantly increasing shipping times and costs. This crisis is expected to add 0.7 percentage points to global core goods inflation in the first half of 2024 (J.P. Morgan, 2024).