Shipping delays, cost increases may be on the horizon

Aerial view of a large container cargo ship moving through the ocean.

Piracy in the Red Sea and low water levels within the Panama Canal are hindering global trade, with the ramifications having the potential to be felt within the WSU system.

Supply chain experts warn that these challenges affecting large container ships could lead to delays as well as increased costs.

“It’s possible that these disruptions could start to impact some of our orders for things like scientific and research equipment that comes from overseas,” Eric Rogers, senior director of Procurement and Contract Services at WSU, said. “We could see increased lead times, and we could see things get more expensive.”

Rogers is encouraging WSU faculty and staff responsible for procuring vital equipment to keep these issues in mind in the months to come. Global trade observers have already noted increases to freight rates, ship reroutes and trip cancellations.

Attacks on shipping vessels in the Red Sea rose beginning in late November as a result of ongoing conflict in the region, according to a recent article in The Guardian. More than two dozen incidents were reported between Nov. 25 and Jan. 1 along the Bab-el-Mandeb strait, which connects the Red Sea and the Gulf of Aden and thereby linking the Mediterranean Sea with the Indian Ocean.

On the other side of the world, low water levels around the Panama Canal prompted officials to limit the number of ships able to cross, with Fortune reporting that limits last year were as strict as they’ve been in more than three decades. The waterway enables an estimated $270 billion a year in global trade. According to Fortune, the Panama Canal Authority is exploring options like cloud seeding to increase rainfall and creating an artificial lake, but these would take significant time and financial resources.

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