The world’s maritime supply chain has taken a beating because of the actions of Iran-backed Houthi rebels in the Red Sea and the reduced capacity of the Panama Canal. However, there is an even larger supply chain crisis looming just over the horizon: the closure of the Strait of Taiwan by the Chinese People’s Liberation Army Navy.
The growing supply chain tensions began in October 2023, when Iranian-backed Houthi rebels increased attacks on commercial shipping in the Red Sea, causing shipping companies to reroute their ships around Africa’s Cape of Good Hope. This rerouting has added an additional two weeks to the supply chain and is now contributing to a shortage of available shipping containers. As of Jan. 24, approximately 562 vessels, accounting for more than 7.5 million TEUs of capacity, or nearly 25% of global capacity, have diverted or will divert away from the Suez Canal.
