CURRENT CHALLENGES IN GLOBAL LOGISTICS

08 July | 2024

Tanger Med Port, Morocco. Source: Tanger Med Port Authority

The global logistics sector is facing significant challenges from political, environmental, and operational disruptions. These issues are creating a ripple effect and affecting the supply chain worldwide.

Mediterranean Port Congestion

One of the primary issues is the increased congestion at Mediterranean transshipment ports, such as Tangier-Med in Morocco and Algeciras in Spain. Another source of congestion is the diversions from the Red Sea, with many ports experiencing capacity issues and longer than normal wait times. The increased cargo volumes from the EU’s FuelEU Maritime Regulation are also straining these ports, causing shipping companies to adjust their operations to manage the high yard densities and extended wait times.

Congestion in China and Southeast Asia

Ports in China and Southeast Asia are also experiencing rising congestion due to increased volumes and geopolitical tensions. The Red Sea crisis has intensified these bottlenecks and caused ships to reroute, leading to significant delays and extended waiting times at these key logistic hubs. These delays are disrupting schedules and adding to the operational challenges for shipping companies.

Panama Canal Drought

Environmental factors are also playing a crucial role in disrupting global logistics. The historic drought at the Panama Canal has significantly impacted global shipping. The lowering of water levels is restricting the number of vessels that can transit through the canal and the amount of cargo they can carry. Despite the efforts to manage water usage and maintain operations, the lingering impact of the drought continues to challenge the logistics sector. This has forced shipping companies to seek alternative routes, further complicating global supply chains.

Conclusion

The overlapping of these issues highlights the fragility of international supply chains and the need for adaptive strategies in logistics. From regulatory impacts and geopolitical tensions to environmental challenges, the logistics sector must navigate a complex landscape to maintain the flow of goods worldwide. As these difficulties persist, supply chain stakeholders must collaborate and innovate to tackle them and ensure global logistics sustainability.

Sources: The Maritime Executive/Journal of Commerce/CGTN America/Safety4Sea

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