Oceans are vital to the way goods move around the world as they carry close to 90 percent of global trade by both volume and value. Almost everything we use in daily life travels across the ocean at some point whether it’s the phone in your hand, the clothes in your wardrobe, the medicine in your cabinet, or the car you drive it likely arrived by sea before it reached you. This system has always faced challenges, but in recent years, the pressures have intensified. Geopolitical tensions, shifting trade routes, and growing global demand have all contributed to rising freight costs and made international logistics even more unpredictable, disrupting global supply chains.
In the last few years, the Red Sea has become a major high-risk zone. Ongoing instability in the region has led many shipping companies to avoid this key passage and reroute vessels around the Cape of Good Hope instead. This shift is significant because nearly 15 percent of global seaborne trade usually passes through the Red Sea. While the alternative route is considered safer, it adds 10 to 15 days to the journey and increases fuel and crew costs.
According to Freightos and Real Logistics, these changes have caused sharp spikes in shipping prices. Spot container rates on some routes have risen between 200 and 400 percent. This means that the cost to ship a single container has in some cases more than tripled or even quadrupled compared to earlier in the year. Rates for shipments from Asia to Europe have increased by around 32 percent, while shipping from Asia to the US West Coast has nearly doubled. These rising costs are causing serious difficulties for manufacturers, retailers, and distributors, which ultimately affect the end customer. The challenges go beyond just the cost of transport. New surcharges, rising fuel prices, and higher insurance premiums are making logistics much more expensive. Longer delivery times are also disrupting planning. Some companies are missing key delivery windows, while others are having to hold more inventory to reduce the risk of running out of stock. The just in time model, (also known as the Toyota Production Systems) is proving much harder to manage in today’s unpredictable environment.
Forbes recently highlighted just how critical the situation has become and why greater flexibility is now essential for businesses to cope and grow in these conditions. Traditional supply chain planning, built on fixed models and slow updates, is struggling to keep up with the current supply chain environment. In this new landscape, companies need tools that allow them to move quickly and see the full picture as it evolves.
This is where Optii comes in. Optii is a supply chain platform that lets companies model their transport options in real time. Using digital twin technology, Optii helps companies understand how a disruption will affect service levels, costs, and working capital before it materialises. Oii.ai is working closely with Maersk, one of the world’s leading shipping companies to bring up to date information on alternative routes and delivery options straight into the platform. Optii then helps clients model how much time and money this option would save and assess whether it aligns with their operational and financial goals. Using Optii, clients can quickly test different transport plans and see how each one would impact their operations. Exploring different alternatives also helps them adjust inventory strategies to avoid unnecessary stockpiling or delays.
Together with Maersk, Optii helps businesses respond with speed and clarity. Ocean shipping will always be central to global trade but as disruptions become more frequent, the question is no longer whether they will happen, but how well prepared a business is to adapt. With the right tools, companies can approach uncertainty with greater confidence and make more deliberate choices, rather than only reacting when problems arise.
References
https://www.bbc.co.uk/news/business-68398413
https://www.investopedia.com/terms/j/jit.asp
