I was going to post this elsewhere, but in this thread makes more sense. Are we going to see large shipping companies and companies with huge European supply chains choose voluntarily to route...
I was going to post this elsewhere, but in this thread makes more sense. Are we going to see large shipping companies and companies with huge European supply chains choose voluntarily to route around the Red Sea/Suez Canal? What will be the knock-on effects of that?
Re-routing (long-term) around the Suez would be a very uncomfortable option for Egypt, but shipping companies already did that once when the Ever Given got stuck and at great cost. I've seen estimates of $9.7 billion to $14 billion in trade interrupted per day, but since most of that cargo eventually got to its destination (whether the cargo was still good is another question), it may have cost in excess of $6 billion per week in delays and additional costs.
I'm sure there would be an intense period of interruption that would be very uncomfortable for Europe while routes and timetables are changed, though the DW article says that Tesla is only foreseeing a delay of fewer than 2 weeks. I'm sure there would be other considerations as well, but off the top of my head I can only think of some additional costs of shipping, some risks and changes at various ports in Africa and Europe that would handle more traffic and transshipment. There must be other factors?
Anyway, I do wonder if it would be cheaper to absorb those costs upfront than to make more strikes on Houthis bases and materiel, were that the actual trade-off. Diplomatically it's not the only trade-off of course, but if the re-routing of shipping is inevitable, I'm interested to see if capitalist mechanisms switch on and companies decide that it's better to route around the problem area. I don't think Tesla will be the first to do it, but they'll be more vocal than their suppliers.
I was going to post this elsewhere, but in this thread makes more sense. Are we going to see large shipping companies and companies with huge European supply chains choose voluntarily to route around the Red Sea/Suez Canal? What will be the knock-on effects of that?
Re-routing (long-term) around the Suez would be a very uncomfortable option for Egypt, but shipping companies already did that once when the Ever Given got stuck and at great cost. I've seen estimates of $9.7 billion to $14 billion in trade interrupted per day, but since most of that cargo eventually got to its destination (whether the cargo was still good is another question), it may have cost in excess of $6 billion per week in delays and additional costs.
I'm sure there would be an intense period of interruption that would be very uncomfortable for Europe while routes and timetables are changed, though the DW article says that Tesla is only foreseeing a delay of fewer than 2 weeks. I'm sure there would be other considerations as well, but off the top of my head I can only think of some additional costs of shipping, some risks and changes at various ports in Africa and Europe that would handle more traffic and transshipment. There must be other factors?
Anyway, I do wonder if it would be cheaper to absorb those costs upfront than to make more strikes on Houthis bases and materiel, were that the actual trade-off. Diplomatically it's not the only trade-off of course, but if the re-routing of shipping is inevitable, I'm interested to see if capitalist mechanisms switch on and companies decide that it's better to route around the problem area. I don't think Tesla will be the first to do it, but they'll be more vocal than their suppliers.