The simultaneous limited capacity of two crucial maritime trading chokepoints, the Suez and Panama Canals, is causing significant disruptions to the global supply chain. In Panama, an extended and severe drought, partly linked to the El Niño climate cycle and long-term climate change, has led to a 36% reduction in the canal’s capacity. Meanwhile, attacks by Houthi forces in Yemen have made the Red Sea, and by extension, the Suez Canal, a risky option for shipping companies. This has forced many major shipping firms to reroute around the Cape of Good Hope, adding complexities and delays to supply chains. Experts warn that these dual canal delays are likely to eventually push up prices for certain products, particularly manufactured goods that depend on timely shipments of parts to factories. The situation underscores the vulnerability and fragility of modern supply chains in the face of compounding climate-related events and geopolitical challenges.

Inspired by: https://www.axios.com/2024/01/24/red-sea-panama-canal-climate-supply-chains