- According to the PortWatch platform (a collaborative initiative of IMF and the University of Oxford):
- Due to attacks on vessels in the Red Sea, the volume of trade through the Suez Canal dropped by 50% year-over-year in the first two months of the year 2024.
- The Suez Canal is the shortest maritime route between Asia and Europe.
- It usually accounts for about 15% of global maritime trade.
- Due to attacks on vessels in the Red Sea, the volume of trade through the Suez Canal dropped by 50% year-over-year in the first two months of the year 2024.
- Instead, several shipping companies diverted their ships around the Cape of Good Hope.
- Additionally, due to the severe drought in the Panama Canal, trade volume fell by almost 32% from the previous year
- Panama Canal connects the Atlantic and Pacific oceans through the narrow Isthmus of Panama.
- It usually accounts for about 5% of global maritime trade.
- Impact of trade disruption
- Supply chain disruption may lead to Inflationary pressure and food and energy security threats.
- Increased delivery time due to diversions hurts companies with limited inventories.
- Ship re-routing could affect customs records on imports and exports.
- This will make it more difficult to gauge the underlying momentum of global trade and economic activity in the coming months.
Initiatives taken for stability in the Red Sea
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