A great trade rearrangement? The Red Sea crisis over the last two years — unlike past short-term shocks like the pandemic’s short-term shock or the Suez Canal 2021 blockage — has become a source of sustained disruption, resulting in major detours, emissions hikes, and a rise in war risk premiums. This crisis was exacerbated by the swinging US tariffs last year, accelerating previously observed de-risking trends such as fleet and route diversification.

EnterpriseAM Logistics sat down with Amin Al Qawasmeh (LinkedIn) — maritime specialist at Jordan’s Phoenicia Maritime Shipping Services — to get an overview of the disruptions facing the shipping industry, what this means for global trade on the short and long terms, and how firms are mitigating the challenges.

EnterpriseAM: Some are saying the world’s trade order is in a period of transformation? Do you agree? If so, how?

AQ. The global trade map is being redrawn — the old East-West superhighway is giving way to a web of shorter and friendlier lanes. The global trade landscape is rapidly fragmenting, driven by geopolitical tensions like the Red Sea conflict and escalating US tariffs.

This is forcing a shift from globalized supply chains toward more secure, regional blocs. Trade is now splintering: African trade with the GCC, for example, is projected to surge by 61% by 2032, and China’s Belt and Road Initiative continues to reroute flows. The old East-West superhighway is clearly giving way to a web of shorter, “friendlier” lanes that prioritize resilience and political alliances over traditional efficiency.

EnterpriseAM: How can we tell which of these changes are temporary reactions and which are here to stay?

AQ. Tariffs and shipping detours are trending toward lasting scars, not temporary blips. Red Sea attacks dramatically hiked Asia-Europe shipping times and container rates. Proposed reciprocal tariffs are accelerating “de-risking,” pushing companies to front-load imports and leading to a drop in US imports. With this choppier trade environment, efforts to create adaptable supply chains and multilateral agreements are set to have a lasting effect — proving that diversification is key to weathering the new, less-globalized reality.

EnterpriseAM: Where do the MENA and GCC regions stand in relation to these changes?

AQ. It’s a mixed bag for the GCC-MENA region — with the GCC establishing itself as a vital “non-aligned hub” maintaining ties with both the US and China while pushing ambitious diversification plans. This strategy is paying off: UAE non-oil trade surged 14.6% last year, and GCC GDP is set for solid growth. Despite challenges like a 57.5% drop in Suez Canal transits, the region is still key to new corridors like the India-Middle East-Europe Economic Corridor (IMEC), which could significantly cut Asia-Europe transit times. Ultimately, the GCC’s potential as a logistics powerhouse depends on global stability — less tension means a boom, whereas continued friction means higher trade costs.

EnterpriseAM: How are businesses balancing immediate fixes with long-term plans to diversify their supply chains?

AQ.Businesses are focused on both immediate fixes and long-term diversification to manage current trade disruptions. Immediate actions include stockpiling inventory and using hybrid sea-air routes to bypass Red Sea delays. The long-term strategy is focused on resilience: some GCC executives are regionally diversifying suppliers to cut logistics times. This diversification is costly but crucial. Meanwhile, other players are prioritizing new trade pacts to limit policy unpredictabilities. This means that firms need to balance quick solutions with strategic, long-term roadmaps.

EnterpriseAM: How are shipping companies faring in this global environment?

AQ. Shipping companies are innovating heavily despite being in survival mode. Rerouting via the Cape of Good Hope has increased ton-miles — necessitating major fleet adjustments and large investments, such as CMA CGM’s USD 20 bn US logistics commitment. Technology is also key, with AI being used for predictive routing and blockchain for tracking.

EnterpriseAM: How did the Red Sea crisis impact medium and smaller shipping companies in our region?

AQ. Large liners, such as Maersk, managed Red Sea disruption by using naval escorts and leveraging their scale to absorb surcharges. In contrast, small and medium-sized enterprises (SMEs) were devastated: their volumes at Saudi Red Sea ports fell 45%, and high war risk premiums and long detours caused major cashflow crises and route cancellations. Lacking buffers, these smaller players face significant risk, despite some pivoting to intra-GCC land transport and regional reshoring efforts like Vision 2030.

EnterpriseAM: Can air cargo realistically replace a significant portion of sea freight, and is this shift permanent?

AQ. Air cargo’s recent boom — up 11% y-o-y — is a direct result of Red Sea disruptions and was mainly driven by diversions from time-sensitive freight. While air freight handles 35% of trade by value (with rates at USD 5-6/kg), it won’t replace ocean shipping, which is 12-16 times cheaper and vastly more fuel-efficient. The surge is temporary; e-commerce is plateauing, and capacity growth is limited. Air on its own is a high-cost option and is better utilized to serve as a bridge in hybrid sea-air models.

EnterpriseAM: What specific roles can AI and blockchain play for the sector during this period?

AQ. AI and blockchain are revolutionizing global trade by addressing complex issues like geopolitical risks and shipping snags. AI applications have improved the way we predict demand, optimize inventory, and preemptively reroute shipments, with up to 70% of logistics tasks expected to be automated by 2030.

Simultaneously, blockchain serves as a secure, incorruptible ledger, ensuring transparency, verifying clean sourcing, and using smart contracts to speed up customs and cashflow. With the supply chain blockchain market surging toward USD 1.26 bn and global e-commerce growing, this digital duo is establishing a smarter, greener, and more resilient trade network, aligning with modernization drives in major hubs like the GCC.

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