Great Belt strait disruption not as potentially damaging to shipping as regional conflict, argues Bayes supply chain expert
During a naval military exercise that took place earlier this month, a missile launcher from the Niels Juel frigate malfunctioned on Thursday 4 April, causing the Danish military to close off the airspace and strait to aircraft and shipping vessels.
Despite the disruption this is expected to cause, a supply chain expert from Bayes Business School (formerly Cass) believes it remains of less long-term significance to the shipping industry than conflict in the Middle East.
Professor ManMohan Sodhi, Professor of Operations & Supply Chain Management at Bayes, said:
"This relates to an incident with shipping closures off the coast of Denmark following the closure of the Baltimore port and the Danish incident in the Red Sea a few days ago. These incidents individually cause some disruption, but only in the short term.”
A statement by the Danish Armed Forces explained that the problem arose when the booster and missile launcher became activated during a mandatory test. Until it can be deactivated, there is a risk of the missile launching and potentially dispersing missile debris in the Great Belt strait.
With the strait being a major shipping lane for international trade, this issue has caused the strait and nearby airspace to be closed off to shipping vessels and aircraft, which will affect the shipping industry and supply chains.
However, as Professor Sodhi points out, this is not the only problem.
He added:
"The real danger to the shipping industry and global supply chains is the systemic risk posed by the conflict in Gaza following the 7 October Hamas attack but also in the West Bank. Despite pressure from its allies, at least in public, the Israelis have expanded the conflict with attacks on the Iranian embassy in Syria and Hezbollah in Lebanon. At the same time, the Houthis have attacked ships in the Red Sea in support of the Palestinians, affecting many noncombatant countries’ supply chains despite being bombed by the US and UK.
"The danger is that Western countries may be sleepwalking towards a wider conflagration, which, if it were to happen eventually, would most definitely impact shipping and supply chains for a long time. The shipping industry and global shippers must plan for such a possibility, but such planning may itself be a disruption."
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Professor of Operations and Supply Chain Management
