The transformations of logistics chains following the critical situation in the Suez Canal and the impacts on Italy

The maritime sector has been severely impacted by the critical situation in the Red Sea area. Assaults on ships by the Houthis have prompted shipowners to carry out the so-called re-routing, circumnavigating the Cape of Good Hope for security reasons, thus skipping the Suez Canal, which is one of the main hubs of international trade. In this podcast, SRM (Research Centre related to the Intesa Sanpaolo Group), points out that the impacts on logistics chains have been significant in the container sector; in the January-May 2024 period, 676 ships diverted their route and Suez recorded a 47% drop in transits compared to 2023¹.

THE MAIN EFFECTS ON LOGISTICS
 

• Increase in freight rates: by increasing the cost of the voyage (e.g. crew and more fuel) and keeping ships longer at sea resulted in an increase in container shipping prices which in June exceeded USD4,700² according to the Drewry World Container Index.
• Delays in shipments of goods: route travel times increased by 30-40%; with an estimated average delay in the delivery of goods of 10-20 days. This is causing inconvenience for companies that have to redefine production times and sales strategies.

THE MOST IMMEDIATE REACTIONS OF THE MARITIME SYSTEM
 

• Shipping companies, in order to manage services over periods of time which have become longer, have placed more hold capacity at sea; this has led to more frequent voyages and has also had an impact on the idle fleet by lowering its levels.
• Companies in some sectors are creating more inventory so as not to put pressure on production cycles and ensure greater continuity (the so-called Just in Case model).

IMPACTS ON ITALIAN PORTS

Italy's maritime traffic transiting through Suez is significant: around 40% of the maritime import/export generated by our companies, amounting to EUR130 billion, passes through the Canal every year³. This makes the production system particularly vulnerable to interruptions or slowdowns at Suez.

The consequences on ports⁴:

• Our ports, particularly those with a strong vocation for container traffic, are coping very well with the strategies adopted by companies.
• For some of the ports for which we have data on containers handled in the first 4 months of 2024 (Genoa and Savona, Civitavecchia, Gioia Tauro, Bari, Ravenna, Trieste), the overall performance is positive, equal to +10%.  The figure of our main transhipment port, Gioia Tauro, stands out with a +26%.
• The most important consequence is the need to reschedule arrivals and departures and the availability of docks due to ship delays.
• Another important effect, specific for Europe, concerns  decarbonisation of the maritime sector: longer routes will force ships to have higher CO2 emissions and therefore to fulfil more obligations in relation to the new ETS regulations

COMPANIES’ ADJUSTMENTS AND THE FUTURE OF SHORT SEA SHIPPING

All players in the maritime supply chain are adapting their supply chain management times and methods to the new requirements. In the long term, it is desirable that companies adopt strategies aimed at shortening supply chains, the consequence of which will be the shortening of maritime routes, favouring the so-called Short Sea Shipping, in which our shipowners are specialised.

1  Clarksons

2  Drewry

3  SRM based on Eurostat data

4  The traffic of the ports mentioned below are SRM elaborations based on Assoporti data