Alicante’s Trade Chains Hit by Red Sea Route Disruptions and Rising Shipping Costs

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Alicante’s industry faces new pressures as major shipping companies suspend routes through the Red Sea and the Suez Canal. The moves come in response to Houthi attacks on vessels tied to the Israeli-Gaza conflict. The consequence is a route that stretches over 8,000 kilometers between Asia and the peninsula, adding six to fourteen days to voyages that must detour around Africa, pushing freight costs higher and tightening availability.

What happened in 2021 when Evergreen set an effective grounding is still on many minds. The Red Sea crossing was briefly shut for six days, yet its effects lingered for months in global supply chains. It matters because nearly 40% of Alicante’s imports come from Asia, with the majority entering by sea through this corridor.

The disruption hits sectors like footwear and toys hardest, even as production relocations to nearer regions continue after the pandemic. The local industry relies on outsourced manufacturing, with imports and components arriving from Asia.

From January to October, ICEX data show Alicante importing 1.823 billion euros worth of goods, or 39.5% of the border’s total imports. China remains the dominant supplier with 1,198 million euros (about 26% of all foreign purchases by Alicante companies), followed by Vietnam (172 million), India (120 million), Taiwan (58 million), and South Korea (35 million).

offshore

By product, footwear stands out as a high-value import category during the ten-month period, totaling 564 million euros in a region that once moved significant production there to cut costs in the early 2000s. Leather goods add another 114 million euros.

Containers for transporting goods through the port of Alicante are a visible reminder of the logistics challenges at hand. Footwear industry representatives express concern that Red Sea disruptions could drive higher transport costs and global supply chain delays. Marian Cano, president of the Valencian Association of Footwear Entrepreneurs (Avecal), notes the risk of a broader impact on logistics timelines.

José Antonio Pastor, director general of the Spanish Association of Toy Manufacturers (AEFJ), adds that the Evergreen disruption illustrates how a six-month recovery period stretches the entire supply chain. He emphasizes the need to recalculate timelines for all materials and acknowledges the potential pressure on exports due to rising transport costs.

Across sectors, the industry sources finished products from Asia and redistributes them among clients, along with parts and components, especially electronics. Total purchases in this area until October reach 94.3 million euros, a figure comparable to other plastics manufacturers (94.5 million), plus rubber products and around 40 million more in related goods.

raw materials

Rising oil and polymer prices would further affect local production if supply chains lengthen significantly. Polymers are a core raw material for Ibi’s plastic sector, as noted by Hector Torrente, the director of the Ibi-based employers’ association. He explains that longer supply chains mean fewer products and higher prices, while remaining optimistic that the situation will improve soon.

In Alicante’s Asian imports, textiles and apparel remain notable, including roughly 120 million euros in yarn and fabric, about 140 million euros in ready-made clothing, plus 106 million euros in machinery and mechanical devices, and around 123 million euros in electrical appliances and supplies.

Salvador Navarro, president of the autonomous employers’ association CEV, observes that the current situation won’t block international trade, but ships will be diverted, causing delays and higher delivery costs. He notes that firms are already contending with overall cost increases, a trend that could be amplified if energy costs rise further.

Additionally, energy costs could climb if tensions persist, pushing up gas and oil prices and affecting energy-intensive production activities.

Eight major shipping firms have already removed the Red Sea route from their itineraries.

The decision by the Houthi militia to strike ships in retaliation for the Gaza invasion has driven several large operators to reroute to avoid the crossing. Companies including MSC, CMA CGM, Maersk, Hapag-Lloyd, and Chinese carriers such as Cosco, OOCL, and Evergreen Marine have shifted routes. BP has also announced avoiding the area to protect crew safety, accepting higher costs from the detours. Reports from Chinese sources indicate these adjustments have pushed freight and crude oil prices higher due to demand and route changes.

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