Iran-Israel Conflict Disrupts International Logistics

JAKARTA – Although not prolonged, the conflict between Iran and Israel has caused disruption to international logistics. This is because most global logistics routes pass through Middle Eastern waters.

This was stated by the Executive Director of the Indonesian Logistics and Forwarders Association (ALFI) Basilio Dias Araujo in the Market Review program broadcast on the YouTube IDX Channel, Monday (22/4/2024). Basilio said that 80% of goods traded in the world transported using sea transportation were affected by the Iran-Israel conflict.

“With the threat (of war) of course it has a very big impact, because we see that ships have to sail further. So far, via the Red Sea or the Suez Canal, they have had to be diverted,” said Basilio.

According to him, this sea lane diversion created a difference in the number of days between 5-7 days because ships were forced to go through the Cape of Good Hope in South Africa. “Of course the impact on logistics costs is very high,” he said.

Basilio added that Asian countries would receive the greatest impact. The reason is, Asia is closely tied to sea and air logistics routes. Meanwhile Europe is still relatively stable because it has more shipping options.

“European countries are not as big as countries in Asia because in Europe they have the Eurasian Land Bridge, a train connection from China to Europe. Likewise in the US they have the North America Land Bridge so the impact can be minimized,” he explained.

Basilio hopes that the escalation of the conflict between the two countries will not continue so that the negative impact is minimal. “We hope everyone can read this situation so they can monitor this situation because it will have an impact on logistics costs as well,” he concluded.

(fjo)