From medicines to microchips: What happens when the world’s air corridors shut down

In the midst of the renewed conflict between Saudi Arabia and the Houthis in Yemen, I shared comments about the implications of prolonged closures of air corridors for international trade, in an article titled “From medicines to microchips: What happens when the world’s air corridors shut down” by Rana Tabbara for Arabian Business.

I estimated that “detours of 10 to 15 per cent around conflict zones can translate into cargo capacity reductions of 15 to 25 per cent on certain long-haul routes” and argued that “global logistics is moving away from a world defined by volatility, uncertainty, complexity and ambiguity, commonly known as VUCA, towards a more fragile environment described as BANI: brittle, anxious, non-linear and incomprehensible.“

I went on to comment that “prolonged disruption could accelerate nearshoring and regional manufacturing, with companies seeking to produce, assemble and store goods closer to their customers“, and predicted that “this shift could support (the Gulf) evolution into a manufacturing and value-added logistics centre.“

Read the full article here.

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