Red Sea Crisis Could Shift Global Supply Chains, Potentially Benefiting Morocco

"The passage through the Panama Canal has also become complicated. Today, geopolitical tensions are such that they can amplify a movement that we had already begun to observe, that of the shift in supply chains. Some European industrialists could thus choose to transfer their Asian production to other countries closer, such as Turkey or Morocco," analyzes economist Pierre Cariou in an interview with the French weekly L’Express.

The danger of the Bab al-Mandab strait has prompted six giants of maritime transport, namely the French CMA-CGM, the Danish Maersk, the German Hapag-Lloyd, the Italo-Swiss MSC, the Taiwanese Evergreen and the Korean HMM, to suspend the passage of their ships in the Red Sea until further notice. "Today, it is geopolitics that is disrupting the Suez Canal, through which between 10% and 15% of world maritime trade transits, notes Pierre Cariou. Moreover, 60% to 80% of European imports use this route. It is through it that oil, coal, iron ore, semi-finished and finished products pass".

If this situation forces shipowners to divert their vessels towards the Cape of Good Hope in South Africa, this solution is not without consequences on their activity. The sailing time at sea will be extended by 10 days. "Beyond the issues of crew safety and insurance, this alternative route will have impacts on the logistics chain. Ten additional days, for goods leaving China for Europe, means 45 days of navigation instead of 35. Now, a ship at sea costs about $60,000 per day: so you have to count $600,000 more," explains the maritime transport specialist.

He continues: "On the scale of a large container ship, this amount is not insurmountable. Especially since by avoiding the Suez Canal, these ships save on passage fees, in an amount roughly equivalent. But this detour causes additional fuel expenses, a cost item that represents half of the transport cost." This situation could have a negative impact on the final price. "Importers will want to secure their supplies and shipowners could be tempted to take advantage of it, by increasing their rates by 20% when their costs only increase by 10%," the French economist further explains.