Supply chain issues are here to stay
During the pandemic, world trade in goods has benefited from the global recovery in retail sales and industrial production, while other sectors remain much harder-hit by lockdowns and uncertainty, so much so that global trade’s recovery has outpaced global GDP. Ocean freight, normally responsible for the bulk of world goods trade, has had to compensate for reductions in air freight capacity while passenger travel remains restricted.
Ocean freight has become even more important, putting all capacity under pressure
Global trade in goods and different freight types, annual growth
Source: CPB Netherlands Bureau for Economic Policy Analysis, Institute of Shipping Economics and Logistics (ISL) and Leibniz-Institut für Wirtschaftsforschung (RWI), International Air Transport Association (IATA); and ING calculations.
Big ships and long supply chains
Looking for alternatives to Suez It is certainly a very sensible move for Japanese companies to at least look into alternative routes, although they must remember that each of those will also have drawbacks, Yoshitsugu Hayashi, a professor of transportation policy and systems at Chubu University, told DW.
According to Hayashi, there are three alternative routes that are available to link East Asia with Europe, while a fourth is under development.
The first is a return to the journey around the Cape of Good Hope in South Africa, which was the route used before the 193-kilometer-long (120-mile) Suez Canal was completed in November 1869.