History Repeats Itself: Pirates, Conflict & Shipping Routes

Unstable shipping routes are being reconsidered. The problem is current, but not new. How will it impact the Port of Vancouver? 

When pirates, conflict, accidents, climate, and natural disasters impact shipping routes, now, as in the past, alternate arrangements must be made. Disruptions to shipping routes around the world have led to a flurry of re-planning and re-routing, sending ripples through supply chains.

The horrific accident that resulted in the collapse of the Key Bridge in Baltimore is the latest example of an unforeseen event impacting business as usual at sea and at port. Even as the tragic consequences were being processed, officials turned their attention to the accident’s significant logistical implications and how they could best be mitigated.1

Around the globe, pirates, conflict, and climate conditions have led to new routes being used to ship massive volumes of goods. While these complications are significant, they’re certainly not without precedent. Before examining problem areas and their potential impact on the Port of Vancouver, let’s note some historical precedents.

Historical Precedent for Pirates Impacting Shipping Routes 

During the 16th to 19th centuries, pirates, based on the Barbary Coast of North Africa (present-day Morocco, Algeria, Tunisia, and Libya), preyed upon shipping in the Mediterranean, the Atlantic, and even as far as Iceland.2

The Barbary Pirates would capture merchant ships and hold their crews for ransom, or enslave them. The severity of the threat they posed led many maritime nations to alter their shipping routes to avoid the areas most heavily plagued by piracy. Additionally, some European powers chose to pay tribute to the Barbary States to ensure safe passage for their ships, rather than risk the pirate-infested waters. This piracy problem played a significant role in international relations and maritime strategies of the time and even influenced the early foreign policy of the United States, leading to the First and Second Barbary Wars in the early 19th century.

The pressure and threat from the Barbary Pirates had economic implications as well, altering trade routes and increasing shipping costs due to the need for more heavily armed merchant vessels and the costs of tributes and ransoms.

This serves as just one example of violence, or the threat of it, leading to new routes. Even Christopher Columbus’ voyage of 1492 was undertaken, at least in part, in an attempt to find alternatives to the dangerous Silk Road trade route.

Despite the passage of time, problems of a similar nature exist today. 

Current Problematic Shipping Routes  

Since the onset of the COVID-19 pandemic, supply chains have found themselves making headlines more often than anyone would hope for. Three major hot spots currently creating problems, however, actually have little to do with the pandemic.

Red Sea Crisis  

Attacks on commercial vessels in the Red Sea, particularly due to Houthi rebel activities, have significantly disrupted shipping through the Suez Canal.3 This has forced vessels to avoid the route, opting for longer passages such as the southern tip of Africa. Shipping and logistics companies are also increasing their usage of long-haul shipping between Europe and Asia and utilizing land bridges over the Arabian Peninsula.

The disruptions have led to a rise in global shipping costs, which in turn could affect consumer prices and contribute to inflation in various economies. 

Black Sea Shipping Disruptions 

The ongoing war in Ukraine has caused significant shifts in oil and grain trade routes, altering established patterns in the Black Sea region.4 This adds to the complexity of the global shipping and supply chain scenario​​.

As with the Red Sea crisis, the result of Black Sea disruptions is a decline in the volume of trade passing through affected routes, such as the Suez Canal. This has led to the usage of longer and more circuitous paths, like around the Cape of Good Hope.

The increase in shipping rates, along with rerouted paths, is leading to higher fuel consumption and greenhouse gas emissions, as vessels travel longer distances at greater speeds to maintain schedules.5 This situation is particularly challenging for developing economies that are more vulnerable to these disruptions.

Low Water Levels Impacting Panama Canal 

The Panama Canal, another critical trade route, is confronting its own issues due to abnormally low water levels.4 This has caused a substantial decrease in ship transits through the canal, impacting global trade flow.

As a result, there is a potential for increased traffic at ports and along routes that serve as alternatives. For example, ports along routes that bypass the Panama Canal, such as those along the Straits of Magellan or the Cape Horn route at the southern tip of South America, might see increased traffic. Additionally, ports on the East Coast of South America, which might serve as alternative transshipment points or stopovers, could also experience more activity.

Countries on the West Coast of South America, including Ecuador, Chile, and Peru, are dependent on the Canal for a substantial portion of their foreign trade volumes and are likely to experience notable impacts.5

Impact of Shipping Crises on Port of Vancouver 

What impact will these disruptions have on the Port of Vancouver? It’s complex, but Vancouver Fraser Port Authority head Peter Xotta believes that they may already be leading to a bump in activity.

“We know that the Red Sea impacts have caused significant rerouting of cargo for vessel operators to all markets,” he said in March. “We have seen a bump in volume in the early part of 2024. Some of that could be partly related to those events.”6

Likewise with the Panama Canal issue.

“I anticipate that folks will be looking at the potential through Canadian supply chains as a result,” Xotta said.

Ultimately, the only thing constant is change. Even during the best of times, potential disruptions to shipping routes are a fact of life. These threats cannot be eliminated but can be planned for and dealt with. Doing so involves coordination between many entities, but such efforts are worthwhile in order to ensure that trade remains ongoing. It boils down to having confidence in your Top Rated logistics provider to guide you through a cost efficient solution. 

Cited Sources

1 Cars, sugar and cruises: How the port of Baltimore closure could … Accessed March 28, 2024. https://www.cnn.com/2024/03/26/business/baltimore-port-autos-cruises/index.html.

2 “Barbary Pirates.” Wikipedia, March 28, 2024. https://en.wikipedia.org/wiki/Barbary_pirates.

3 “The Impacts of the Red Sea Shipping Crisis: J.P. Morgan.” The Impacts of the Red Sea Shipping Crisis | J.P. Morgan, February 8, 2024. https://www.jpmorgan.com/insights/global-research/supply-chain/red-sea-shipping.

4 Unprecedented shipping disruptions raise risk to global trade, … Accessed March 28, 2024. https://unctad.org/news/unprecedented-shipping-disruptions-raise-risk-global-trade-unctad-warns.

5 “Navigating Troubled Waters: Impact to Global Trade of Disruption of Shipping Routes in the Red Sea, Black Sea and Panama Canal.” UNCTAD, February 22, 2024. https://unctad.org/publication/navigating-troubled-waters-impact-global-trade-disruption-shipping-routes-red-sea-black.

6 Press, The Canadian. “Red Sea Attacks Could Push More Cargo to Port of Vancouver after Record Year: CEO.” Global News, March 23, 2024. https://globalnews.ca/news/10380074/red-sea-attacks-port-of-vancouver/.