Page 25 - LUA November December 2024 Issue for website

Photo: DP World slack in the system to deal with another

supply chain shock,” says the report.

FACILITATING TRADE AND
ENHANCING STABILITY
The Red Sea crisis has significantly
disrupted trade across Africa, impacting
one of the world’s most vital maritime
crossroads. The Red Sea Crisis has
sharply impacted African trade flows,
disrupting one of the globe’s critical
maritime pathways. The Economist
Intelligence Unit reports that traffic
through Africa’s Red Sea ports saw a
significant decline earlier this year,
with the Suez Canal handling over 95%
of Asia-Europe shipping experiencing
a 37% year-on-year drop in monthly
transits in January 2024.
In response to geopolitical
uncertainties and climate risks, Africa
is working to strengthen its shipping
capacity and improve trade connectivity.
The report from UNCTAD mentions
that Mauritius, for example, has been
enhancing its resilience to various
threats by strengthening national
for strategically located countries such development policies and collaborating
as Madagascar, Mauritius, Namibia, and with partners within and outside Africa
Tanzania on maritime routes linking Asia to improve maritime security. Its efforts
and Europe. include capacity building, regional
Several East African countries, whose training, and information sharing to
foreign trade relies heavily on the Suez address piracy risks and ensure the safety
Canal accounting for approximately 31% of maritime routes.
and 34% of trade volume for Djibouti Additionally, the country is
and Sudan, respectively are particularly implementing port reforms focused on
vulnerable to these disruptions. One in five people will connectivity and sustainability to boost
For example, East Africa has experienced live in Africa by 2030. resilience. Across the continent, trade
shortages of perishable goods and standard facilitation initiatives like the East African
containers due to extended cargo delivery FDI will continue to Community’s Single Customs Territory
times, disrupting supply chains for products increase. Africa will and one-stop border posts are being used
such as avocados, tea, and coffee. increasingly connect to reduce transit times and costs.
Moreover, the shortage of empty “Our investments aim at enabling higher
containers, caused by carriers with global trade, and capacity and productivity, which not only
prioritising shipments to higher-paying play an increasingly reduce costs but also induce shipping lines
markets like Europe and the United important role, also in to offer more and better services, resulting
States, has come at the expense of in improved connectivity which can further
regions such as Africa mirroring the geopolitics. generate exports,” says van den Essen of
pattern observed during the COVID-19 ROGELIO BUSTO DUARTE APM Terminals.
pandemic, mentions the report. HAPAG-LLOYD As Africa continues its maritime
The Xeneta Ocean Outlook 2025 transformation, the focus remains
highlights how diversions around Africa "If 2024 has been a year framed by on addressing key challenges while
affect TEU-mile demand and available conflict in the Red Sea, then expect more preparing for future growth. The
capacity. While new ship deliveries and of the same because there is no sign of success of current development
slower TEU volume growth will help a political resolution that would allow a initiatives will play a crucial role in
alleviate some of the pressure, they won't large-scale return of container ships to the determining Africa's position in global
be sufficient to offset the impact of another region. This only heightens the danger for trade networks and its economic
major disruption. container shipping because there is little development trajectory.

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