Impact of the Israel-Palestine War on the Logistics Movement

War in any form and place has a humongous potential to disrupt the normal functioning of ports and airports, leading to severe impact on the global logistics movement and supply chain. After the war was declared between Israel and Hamas, a militant group of Palestine on October 8, 2023, various ports and airports near the Gaza border felt the heat of the conflict. Let us delve deeper into the situation to understand the impact the conflict is capable of bringing to the global economy.

Disrupted transportation routes

The ongoing violence could result in substantial disruptions in the logistics sector and transportation routes. Logistics companies across the globe are assessing the situation and striving to come up with alternative solutions. Road connectivity, port and airport operations are affected resulting in delays in the movement of goods and increased cost of cargo.

Increased insurance and transportation costs

The current instability is likely to increase the insurance cost of goods that are transiting the regions. This would impact the way the logistics companies are factoring the price for international movement of cargo, ultimately increasing the cost for the end consumers.

Increased fuel costs

This could be greatly concerning for the global economy as with the rise in fuel prices, shipping lines and airlines might start charging an additional fee, i.e. fuel surcharge fee. With this, freight costs are subjected to rise impacting the entire logistics industry including the end customers.

Turmoil in inventory management

Supply chain disruptions arising from the conflict may lead to reduced inventories for manufacturing companies across the globe. This could affect the day-to-day operations of warehousing companies and their respective inventory management processes.

The main recent developments on the ports and airports in the area are as follows:

Ashdod Port (Israel): At the moment, Ashdod Port is open for business, but it is in emergency mode, permitting only ships transporting dangerous goods under strict guidelines. The Israeli Navy is in charge of the approaches and keeps a large presence in the area.

Ashkelon Port (Israel): Ashkelon port is shut down, but there might be some exceptions in certain circumstances involving the berthing or discharge of cargo at the anchorage.

Haifa Port (Israel): There have been a few delays and cancellations, but the port is still open and operating. Before sending or receiving cargo at the port, shippers are urged to confirm the status of their cargoes with their individual shipping companies.

Ben Gurion Airport (Israel): Ben Gurion Airport has experienced delays and cancellations but is still operational.

Queen Alia International Airport (QAIA): Located about 100 kilometers from the Israeli border is the airport in Amman, Jordan. QAIA is unaffected by the Israel-Hamas conflict.

Beirut-Rafic Hariri International Airport (Lebanon): Recent Israeli airstrikes have not directly impacted Beirut's airport (BEY), nor is there a war raging between Israel and Lebanon at the moment.

Damascus International Airport (Syria): The airport has seen multiple closures due to attacks by both Israeli forces and rebels in Syria.

Way forward

If the conflict escalates more, the situation is highly likely to get worse. According to a report published by S&P Global Market Intelligence, the sectors that would be affected primarily are electronics, healthcare, and defense supply chains. The best way to ensure seamless movement of cargo is to stay abreast of all the latest developments, assess port calls on a regular basis, and track containers in real-time. Robust planning with reliable partners and strategic measures can help in facilitating a smooth movement of cargo across borders.