\u201cNow you as an importer or a company that\u2019s shipping cargo suddenly have a container in France or Tangier, and it\u2019s on you to figure out what to do about this,\u201d says Petersen. Doing nothing means that the cargo racks up higher and higher storage fees. All those costs ultimately get passed on to consumers.<\/p>\n
Petersen tells me that only recently did major shipping companies resume moving cargo through the Red Sea, which had been deemed a hazard due to Houthi attacks. Now that\u2019s come to a standstill because of the war.<\/p>\n
The alternative route has been a long detour around Africa. \u201cIt drives up the price quite a bit, because a voyage costs more, but more importantly, it reduces supply: ships do fewer voyages per year,\u201d says Petersen. \u201cThere was a lot of hope that returning through the Red Sea would increase capacity in the market and reduce prices, but now that\u2019s off the table.\u201d<\/p>\n
Petersen visualises the situation for me by firing up a product called Atlas<\/a>, which tracks the movement of container vessels in real time. Coincidentally, Flexport launched Atlas two days before the war began. Petersen cautioned me that not all the positions are accurate, because many companies have turned off their vessels\u2019 transponders \u2013 or even used high-tech methods to spoof their locations to avoid attacks.<\/p>\n Still, it\u2019s obvious that traffic in the Middle East is moribund. Petersen waves his cursor over a cluster of ships congregating around the UAE port Jebel Ali, which is near the Strait of Hormuz. It looks like the traffic jam at the beginning of La La Land. \u201cThese ships have been stagnant in this area,\u201d he says. \u201cYou wouldn\u2019t normally see so many clustered here.\u201d<\/p>\n That\u2019s not the worst of it, he adds. Flexport isn\u2019t heavily involved in the oil trade, but Petersen thinks that energy shortages will have a bigger negative impact than whatever is in those containers stuck in Tangier. \u201cThe US is self-sufficient, but globally there\u2019s not enough oil to go around \u2013 you\u2019re gonna have shortages, and then you will see a crazy parabolic rise in the price.\u201d<\/p>\n Petersen is not terribly optimistic about what happens to the supply chain if the war goes on. \u201cThey need to get this solved,\u201d he says. \u201cBesides oil, the thing I\u2019m really worried about is inflation.\u201d Petersen notes that the president has said the US might insure<\/a> all ships going through the strait, costing possibly hundreds of billions of dollars.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cNow you as an importer or a company that\u2019s shipping cargo suddenly have a container in France or…\n","protected":false},"author":2,"featured_media":337470,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[114,42,167223,43,167222,167224,40,38,41,39],"class_list":["post-341742","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-business","tag-headlines","tag-industry-economy","tag-news","tag-product-logistics-distribution","tag-product-sourcing-supply-chain","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/341742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=341742"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/341742\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/337470"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=341742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=341742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=341742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}