This is how a large-scale war in the Middle East would be seen in Finns’ everyday life – 2024-04-18 01:20:40

MSC, the world’s largest container shipping company, has already suspended traffic through the Suez Canal. MOHAMED HOSSAM, AOP

Last weekend, a large-scale regional war in the Middle East was closer than it had been in years.

Iran attacked Israel from its own soil with hundreds of drones and missiles. Israel and its allies repelled most of the attacks.

Although Iran’s attacks on Israel raised the stakes, the situation is restrained by the fact that, for the time being, all parties would have more to lose than to win in the wider conflict.

The Suez Canal is already out of use

The Red Sea, which connects Egypt to the Mediterranean via the Suez Canal, is a vital route for international trade.

As a result of the war in Gaza, more and more large shipping companies already announced at the end of last year that they would suspend traffic through the Red Sea.

The reason was the attacks on cargo ships carried out by Yemen’s Houthi rebels, which have been aimed at pressuring Israel into a ceasefire in Gaza.

If, in spite of everything, the war were to flare up in full flames, how would the situation be reflected in Finland? Executive Director of the Finnish Shipbroker’s Association Sari Turkey assess the situation to Iltalehte.

Prices would go up

The effects would not be dramatic, as the situation has already been adapted to.

According to Turkkila, 96 percent of Finland’s foreign trade is transported by sea. About 20 percent of it goes in containers. The rest is bulk cargo and liquid transports.

– If a full-scale war were to break out in the Middle East, new insurance regulations would enter into force in the region. The most immediate consequence would be an increase in insurance premiums, which would be reflected in consumer prices.

According to Turkkila, responsible shipping companies do not under any circumstances take risks regarding their own crew, ships and customers’ cargo.

Fortunately, supply chains are flexible. Shipping companies have adapted to the situation and switched to using a route that goes around Africa.

– Touring Africa takes about a couple of weeks. Costs are increasing, which is reflected in consumer prices. The shipping companies have made the transport chains work without problems. Unfortunately, at the same time, emissions are increasing quite a bit.

Finland is far away but protected

Finland is further away, so there is enough pressure for prices to rise.

Turkkila does not believe that goods will run out of store shelves.

– Our transportation depends on how Europe’s big ports work and how goods can be forwarded from them.

International freight traffic has been changing for a long time and its sensitivity to disturbances has increased.

First, the pandemic and then Russia’s war of aggression against Ukraine have been seen for several years as disruptions to supply chains, rising costs and one of the causes of accelerated inflation.

I also remember how the Ever Given cargo ship got stuck in the Suez Canal for almost a week in 2021, mixing up the entire world’s cargo traffic.

The logistics industry is an adaptable business, Turkkila reminds.

– There will be crises and things will be rearranged. Despite everything, containers are the most convenient way to transport goods and certainly a permanent solution for Finland. There is no return to the other system.

Traffic through the Suez Canal is a matter of Asian imports and exports. Containers carry consumer goods such as clothes or e-commerce orders from Finns to Europe. For example, forest industry products travel from Finland to Asia.

– We rely on sea transport, Turkkila reminds.