In the age of discovery, between the 15th and 17th centuries, lookouts climbed the masts of boats to spot danger. Five centuries later, the men who warn of mishaps in navigation work in large port buildings and are experts in logistics and strategy. In the 15th century, news took months to reach its recipients. Today they are transmitted almost instantaneously.
The Yemeni Houthis began interfering with maritime traffic in the Red Sea days after the October 7 and Hamas attack. In November, the large container transport companies assessed the risk of continuing to navigate in the area. In December, some changed their route in the direction of the Cape of Good Hope, in the south of the African continent. Today, companies such as Maersk, number two in the sector, qualify this decision as final.
That the control of critical points in global maritime traffic such as Bab el-Mandeb (the strait that separates the coasts of Yemen and Djibouti) is in the hands of countries that orbit, to one extent or another, around China, Russia and its allies is a real drama for Western economies.
Large supply chains were created in the 1980s and 1990s by multinationals thanks to the increase in computing capacity, which allowed the activity of subsidiaries and suppliers in distant countries to be monitored in real time. The covid pandemic and the subsequent disruptions in supplies showed how efficient and integrated those chains were and how indispensable they were. Today, the West risks losing control of that nervous system of the world economy.
The immediate effect of diverting traffic to the Cape of Good Hope route is seven more travel days and an increase that can more than double the price of transporting a 40-foot container between Asia and the Western Mediterranean. And the consequence for Western economies can easily be the return of inflation (now that it looked like we could have got it under control). For some economies that were confident that 2024 would be a soft landing year, the second half of the year could be a bit busier than expected.
