17,000 ships usually pass through the Suez Canal a year, carrying an estimated $1trn of goods and accounting for 12% of global trade.

However, due to the ongoing crisis in the Middle East and attacks on shipping in the Red Sea, only a fraction of this trade is currently using this vital trade short cut between Asia and Europe.

With ships increasingly taking a very long route around South Africa and the Cape of Good Hope, the knock-on impact on global trade and the world economy is self-evident.

The Panama Canal is just as important as the Suez Canal for shipping, as the Latin American route also carries $270bn in trade every year.

Throughout 2023, authorities have slowly been putting more and more restrictions on the canal, restricting the number of ships that can travel through and creating a sizeable backlog of vessels waiting to make the trip.

This has created a singular crisis for the world trade network, as two of its most important chokepoints are now operating under heavy restrictions.

The consequences for manufacturers with complex supply chains are likely to be significant. The question is whether the increase in shipping times and associated costs are painful enough for Western manufacturers to refocus their supply chains from “just in time” to “just in case” where reliability and security are prioritised over lower costs and higher profit margins.

We heard after the seismic disruption to global supply chains caused by the pandemic that manufacturers would seek to source raw materials and components closer to home but there is little evidence it actually happened.

Only time will tell if the latest events are sufficient to tip the scales.