/ 13 October 2023

Middle East: Implications for maritime transportation and supply logistics

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The escalation of conflict between Israel and Hamas in Gaza has sent shockwaves through the international community. Beyond the immediate humanitarian concerns and geopolitical consequences, this conflict carries significant implications for the maritime sector and the transportation of goods. 

We will navigate the potential impact of the Israel-Hamas conflict on maritime transportation, with a focus on key transit routes like the Suez Canal. As global trade relies heavily on these crucial passages, it is imperative to explore the role of world powerhouses in preventing disturbances and the stipulations of treaties protecting these vital routes. Furthermore, we will discuss possible solutions to mitigate the risks associated with this volatile region.

The Middle East holds a crucial position in the global supply chain due to its strategic location as a bridge between Europe, Asia, and Africa. 

It is home to vital maritime passages, most notably the Suez Canal, which facilitates the transit of goods between the Mediterranean and Red Seas. Any disruption in this region can have far-reaching consequences for global trade and supply logistics. 

World powers, including the US, Russia, China and the EU, play a pivotal role in preventing disturbances to major trade corridors. Their diplomatic efforts can be instrumental in diffusing conflicts and fostering dialogue among conflicting parties. The recent conflict adds to the vulnerability of the Suez Canal, which already experienced a high-profile blockage in the form of the Evergreen incident. 

Any interruption in the canal’s operations, whether due to military action or heightened tensions, could lead to delays and increased shipping costs.

The Gaza conflict has created significant uncertainty and risk for shipping routes in the Eastern Mediterranean. The instability in this critical region threatens the safety of vessels, potentially deterring shipping companies from utilising these routes. 

The Suez Canal is safeguarded by the Constantinople Convention of 1888 and the subsequent 1956 Protocol of Suez Canal. Increased risk to this notable economic corridor means higher insurance premiums, which could raise transportation costs. The increased risks in the region could result in higher insurance premiums for ships transiting through these waters. This added financial burden may ultimately be passed on to consumers through increased prices for goods.

The Eastern Mediterranean serves as a key gateway for the shipment of goods to and from Europe, Asia and Africa. While Egypt is recognised as the sovereign authority over the canal, and is obligated to keep it open and maintain its security. Any breach of these treaties is a matter of international concern. Treaty violations can lead to sanctions, condemnation by the international community, and the potential involvement of world powers to restore compliance. 

Any prolonged disruption could lead to delays in the delivery of essential goods and negatively impact supply chains, which would reverberate through various industries. The violations of the Suez Canal treaties would trigger international outrage and condemnation. The disruption of a vital trade corridor affects not only regional stability but also global economic interests. 

The proximity of Gaza to the Suez Canal raises concerns about its security. A conflict escalation could potentially lead to attacks or blockades in the vicinity, disrupting the flow of goods through this critical artery. 

Closure or significant disruption of the Suez Canal would force vessels to divert, taking longer and less cost-efficient routes. This could result in increased transportation costs, longer delivery times, and potential congestion at alternative ports.

The Gaza conflict underscores the need for heightened maritime security in the Eastern Mediterranean. States in the region should collaborate to enhance surveillance, patrols, and intelligence — sharing to deter and respond effectively to threats against shipping, particularly at the horn of Africa, where the incidence of pirates happen. 

Maritime incidents, such as attacks on vessels or blockades of ports, could have cascading effects on trade routes, leading to disruptions in the transportation of goods and energy resources. These disruptions can escalate costs for both businesses and consumers. The Middle East is a critical node in various global supply chains. Disruptions in the region can lead to shortages of essential goods and negatively impact industries that rely on timely deliveries.

To mitigate the risk associated with the Suez Canal, companies can explore alternative routes such as the Cape of Good Hope. While longer, this route bypasses the volatile Middle East region, providing a safer option for goods transit. 

Shipping companies can invest in advanced monitoring and intelligence systems to stay informed about regional developments. Early warnings can help vessels make informed decisions about route changes or temporary holds in safe Ports. Diplomatic efforts to reduce tensions in the Middle East are essential. Businesses and governments should support initiatives aimed at achieving lasting peace and stability in the region. 

The governments should start investing in alternative infrastructure, such as rail and road networks, that can provide backup options for transporting goods in case of maritime disruptions. Furthermore, companies should focus on building resilient supply chains that can adapt to disruptions. This includes stockpiling critical materials and diversifying suppliers.

The Israel-Hamas conflict serves as a stark reminder of the geopolitical risks that can impact maritime transportation and global supply logistics. The vulnerabilities of key transit routes like the Suez Canal are underscored during such periods of instability. Proactive measures, including diversification of routes, advanced monitoring, diplomacy, infrastructure investment, and supply chain resilience, can help mitigate these risks.

In an increasingly interconnected world, the challenges facing the maritime sector require thoughtful planning and international cooperation. The hope is that, through such efforts, we can ensure the continued flow of goods and maintain the stability of the global supply chain, even in the face of regional conflicts. 

As we assess the multifaceted challenges, it becomes clear that a coordinated approach, combining enhanced security measures, diversification of transportation routes, infrastructure development and diplomatic efforts, is essential to ensure the continued flow of goods and maintain the stability of maritime transportation in this strategically vital region. By addressing these challenges proactively, we can work towards mitigating the impact of regional conflicts on maritime transportation, safeguarding global trade, and promoting economic resilience.

Solomzi Tshona is a Student at Nelson Mandela University doing Masters in Maritime Management. He is also a Business Development Advisor of the National Youth Development Agency and Former President of the University of Fort Hare Convocation.