Iran conflict redraws sea routes, Africa becomes global shipping pivot

The ongoing conflict in the Gulf and the Red Sea has forced a significant realignment of global maritime trade, with Africa emerging as a crucial pivot point. The closure of the Strait of Hormuz and attacks on vessels in the Red Sea by Iran-backed Houthi militias have made traditional routes untenable, pushing major shipping lines to seek alternatives.

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The port of Jeddah is not at all sized to handle such import volumes and a port congestion situation is emerging.

This shift is not merely a temporary inconvenience; it represents a fundamental reshaping of logistics. Ships are now increasingly circumnavigating the African continent via the Cape of Good Hope, a longer and more costly journey. For deliveries to Gulf countries, land corridors are being established, with the Saudi port of Jeddah becoming a makeshift hub. However, this increased reliance on Jeddah is already straining its capacity, leading to significant port congestion and delays.

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With the current situation in the Gulf, we have put several more coins in the machine, it's not going to get better anytime soon.

The implications extend beyond shipping schedules. The reliance on land routes for essential goods like foodstuffs and manufactured products highlights the fragility of current supply chains. As noted by logistics experts, the situation is unlikely to improve soon, suggesting that these new, albeit less efficient, routes may become the norm for the foreseeable future. This disruption underscores the interconnectedness of global trade and the profound impact that regional conflicts can have on international commerce.

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Today, 70 per cent of the freight traffic that went through the Red Sea in 2023 is being rerouted via the Cape of Good Hope.