The world’s most valuable sea transport routes are more vulnerable than anyone wants to admit.

In the Red Sea, off the north coast of Africa between Yemen and Ethiopia, Houthi rebels have waged a series of relentless attacks in protest of Israel’s war in Gaza. The result is that this key sea transport route has become nearly unusable.

Commercial shipping lines are compensating by sailing south and traversing southern Africa’s Cape of Good Hope. However, this is a distant detour, and the economic fallout is being felt in ports everywhere from Asia to Europe and the U.S.

Here’s what it all means for terminal operators.

Understanding the Surge in Global Sea Transport

Shipping activity is a metric that multiplies the volume of cargo transported by the distance it sails. Compared to 2023, this figure has risen 5.1%, the largest single-year increase since 2010, and it’s being driven largely by the Red Sea Crisis.

What is the Red Sea Crisis?

The Red Sea crisis began in October 2023, when a group of Yemeni rebels known as the Houthis began to launch a series of aerial attacks against merchant and naval vessels in the Red Sea. According to them, the attacks are a protest against the war in Gaza.

The Houthis have stated that they consider any Israel-linked ship a target, but they have shown little restraint in attacking merchant vessels of many nations. 

The attacks have caused hundreds of merchant ships to detour thousands of miles south around the Cape of Good Hope in pursuit of safe travels. This necessary deviation is placing considerable strain on the global shipping industry.

Other Factors

However, not all of the increase can be attributed to the problems in the Red Sea. 

A strong demand pull from the U.S. economy has also increased shipping volumes. Supporting this, The Port of Los Angeles recently reported nine straight months of year-over-year growth.

Finally, it should be noted that July through September is generally peak shipping season. This is the time when retailers are stocking shelves for back-to-school sales and the year-end holidays.

Implications for Terminal Operators

For terminal operators, the primary impact of these developments will be a massive increase in demand. Here’s what it might look like:

Ships Missing Schedules

Detoured ships may have their total transit time increased by as much as 40%, eliminating the possibility of them meeting their original schedules.

Terminal operators should expect to receive more ships than usual during off-hours, as well as sudden surges in demand.

Increased Delays

Given unpredictable schedules and general demand increases, even those ships that arrive on time should expect delays.

Terminal operators should expect frustration from customers, truck companies, and other stakeholders affected by delays.

High Yard Utilization

As demand surges, your yard utilization efficiency will be put to the test. As vessels sit through extended delays, your terminal’s ability to get containers moved as quickly as possible will determine how long those delays ultimately last.

Finally, it’s likely that each of these problems will compound one another, meaning that your terminal’s overall efficiency will be the key factor determining how badly you’re affected.

Strategic Opportunities for Terminal Operators

Although the crisis is ongoing, there are strategic opportunities present for terminal operators who are ready and willing to adapt.

1. Implement a Modern Planning Management System

Terminal operators who haven’t already should implement a state-of-the-art planning management system. This can help when it comes to yard, vessel, and rail planning. It’s an ideal solution to handle fluctuations in cargo volume and vessel turn times.

What to Look for in a Planning Management System

When evaluating these systems, look for features like:

• Comprehensive Graphical Planning Tools
• Automated Discharge and Stowing
• Efficient and Flexible Yard Planning
• Scheduling and Reporting Tools

Each of these features, properly utilized, can help terminal operators greatly improve cargo volume by maximizing efficiency.

2. Enhance Infrastructure Flexibility

Investing in infrastructure that allows for flexible container storage and handling will be critical. This might include the construction of additional storage areas or the adoption of modular storage systems that can be quickly expanded or reconfigured to accommodate fluctuating container volumes.

3. Streamlining Gate Operations

Efficient gate operations are vital. Introducing automated gate systems, pre-booking slots for truck arrivals, and implementing extended gate hours can help alleviate congestion and reduce the time trucks spend within the terminal, improving overall throughput.

4. Building Strategic Partnerships

Establishing strong partnerships with shipping lines, trucking companies, and inland transport providers can create a more coordinated response to increased demand. This collaboration can lead to better communication, shared resources, and more synchronized operations, ultimately reducing delays and optimizing the flow of containers.

5. Increasing Workforce Flexibility and Training

Cross-training employees to perform multiple roles and implementing flexible staffing models can ensure that the terminal remains operational and responsive during peak periods. Investing in training programs that focus on crisis management and operational efficiency can also improve the workforce’s ability to adapt to changing conditions.

Explore Other Technological Solutions with Tideworks

Global sea transportation is fragile. The ongoing crisis in the Red Sea shows that disruptions in global trade are still a reality, making it more important than ever for terminal operators to stay ready. Terminal operators around the globe can prepare for situations like this through a combination of foresight and strategic investments in things like technology and flexible workforces.

For those interested in ensuring their terminal is reliant on only the most modern and powerful software, Tideworks has solutions for you.

Our software powers terminals around the world. We understand the global supply chain and what it takes to keep it moving forward, which is how we provide safe, efficient, and reliable solutions to our customers.