West Asia crisis forces global logistics to shift from Just-in-Time to anytime shipping

Global shipping routes have shifted from efficient Just-In-Time delivery models to an "anyhow, anytime" approach because of the ongoing West Asia crisis, according to DP World Group Chief Executive Officer Yuvraj Narayan. Speaking at a media round table, Mr. Narayan described the global shipping sector as facing a completely broken order marked by much higher costs, a shortage of manpower, and deep uncertainty. For DP World, the main trouble centres around the port of Jebel Ali in Dubai, the ninth-largest port in the world and the largest in West Asia. Access to Jebel Ali is blocked due to the situation at the Strait of Hormuz. In normal years, the port handles 15 million Twenty-Foot Equivalent Unit (TEUs) of traffic, but that volume is expected to drop to about 1 million TEUs for the first 10 months of the year, forcing the company to create new routes. This disruption has also impacted large ships with a 22,000 TEU capacity that were designed to drop off goods midway before smaller vessels took over, forcing routes to become more direct and longer. Shipping companies are also struggling to find crew members willing to risk passage through the Strait of Hormuz. Mr. Narayan noted that the industry might have to resort to hiring mercenaries, pointing out that paying someone $20,000 an hour to pass through the strait is not sustainable. He added that while land routes exist as an alternative, roads, bridges, and pipelines can be easily destroyed, making lasting peace inescapable for trade to return to normal.

Context

DP World is a major Dubai-based global logistics company operating ports and terminals around the world, particularly in key trade hubs like Jebel Ali. The Strait of Hormuz is a crucial global chokepoint for oil and shipping traffic connecting the Persian Gulf to the open ocean. Disruptions in this vital region routinely force global supply chains to reroute, driving up operational costs and delaying shipments worldwide.