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Speaker 1: So during the conflict, you'll have heard it's not just

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Speaker 1: obviously oil supplies that have been disrupted. Remember several weeks

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Speaker 1: ago Peter Engelbrecht, the CEO at job Right, he told

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Speaker 1: you they had containers stuck in ships in that area.

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Speaker 1: They couldn't get them here because of the conflict, and

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Speaker 1: for all I know, they might still be there, along

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Speaker 1: with hundreds of thousands of others. Doctor ernstin Billion is

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Speaker 1: the head lecturer for supply chain Management at i AMM

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Speaker 1: Graduate School. ERNs, Good evening, and thank you for your time.

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Speaker 1: So the straitor for moses By been basically shut, maybe

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Speaker 1: one or two or three ships going through the every

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Speaker 1: day since they started. So is Canal half of its

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Speaker 1: traffic now coming around Cape Town rather than going through there.

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Speaker 1: What do you think it's going to take to convince

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Speaker 1: shipping lines to start going through these areas again?

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Speaker 2: Good evening, Steven, Yeah, I think it's really been a

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Speaker 2: major shock for the logistics companies across the world and

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Speaker 2: for the maritime companies like Musk and others. And so

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Speaker 2: I think it really that uncertainty. They've almost become used

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Speaker 2: to that by now in the last twenty four months

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Speaker 2: because We've had really a wave of different shocks, from

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Speaker 2: the tariff wars last year to of course the Middle

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Speaker 2: East and going back to twenty twenty three with Hamas

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Speaker 2: and Israel. So I think they've become a little bit

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Speaker 2: used to it, but it really requires of them now

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Speaker 2: to look at a more stable solutions going forward.

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Speaker 1: Dorees a stable solution involving a week at the DNA waterfront.

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Speaker 2: Yes, absolutely, I think it's you know, we're seeing a

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Speaker 2: lot of traffic coming around South Africa, of course the

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Speaker 2: Cape of good Oapen line route, but they are not

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Speaker 2: really stopping over and we've not seen a lot of that,

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Speaker 2: so we haven't had the benefit of our route as

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Speaker 2: an alternative for some of these shipping lines up to now.

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Speaker 1: How direct is the impact from the disruption we've seen

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Speaker 1: in the Middle East, So the disruption to the shipping

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Speaker 1: to what we actually have here. I mean oil we

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Speaker 1: obviously all know about, but I'm talking about I don't know,

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Speaker 1: plastic toys or nappies or something. There's disruption to global shipping.

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Speaker 1: We haven't seen shortages here or even any disruptions, but

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Speaker 1: presumably if that is disrupted for much longer, we would

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Speaker 1: start to see some impact.

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Speaker 2: Absolutely. I think the ceasefire, certainly, you know, is a

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Speaker 2: positive sign, but that's not an immediate fix. And we

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Speaker 2: have been able up to now to absorb on the

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Speaker 2: short term some of these you know, shock sym terms

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Speaker 2: of our supply chains. But ongoing this will be passed

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Speaker 2: on to consumers and unfortunately, when that happens, and it

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Speaker 2: happens over a longer period of time, it becomes permanent,

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Speaker 2: so it definitely will see those shortages. I think we

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Speaker 2: also realize that there are structural issues that we have

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Speaker 2: to fix in our economy. You know, we're a very

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Speaker 2: diesel dependent economy in terms of key sectors such as agriculture, mining,

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Speaker 2: and of course parts of the manufacturing industries. So those

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Speaker 2: are things that we're going to have to look at.

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Speaker 2: You know, we spoke about COVID being a black swan event,

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Speaker 2: something no one could have anticipated. Now we are talking

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Speaker 2: about a so called gray rhino event. Those are events

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Speaker 2: that were highly probable, were foreseen, would have an eigh impact,

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Speaker 2: but still they were either neglected or there's not much

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Speaker 2: you can do about them. And I think that's where

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Speaker 2: we find ourselves now, and we have to find solutions

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Speaker 2: both as government and as business going forward.

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Speaker 1: No matter what happens, it would seem the cost of

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Speaker 1: moving stuff around the world is simply going to go

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Speaker 1: up and that is going to have an impact on

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Speaker 1: us at some point. I mean, suppliers and ship has

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Speaker 1: can't absorb those high costs forever. You and I are

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Speaker 1: surely going to pay a price. I can't tell you

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Speaker 1: what price, I can't tell you when, but that surely

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Speaker 1: is going to.

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Speaker 2: Happen, absolutely, and we're already seeing signs of it in

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Speaker 2: certain parts you know, of the economy. But it will

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Speaker 2: certainly prolong for some time. And unfortunately, you know, supply

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Speaker 2: chains lag, there's you know, inbound procurement into the business,

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Speaker 2: then there's production, and then there's distribution, and that lag

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Speaker 2: effect can take months. So these higher costs are not

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Speaker 2: something we'll see for a month or two and then

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Speaker 2: they will disappear. Some of it will only actually start

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Speaker 2: to be seen in our economy in a two to

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Speaker 2: three months from now. And unfortunately, you know, as I say,

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Speaker 2: we live in a time of these constant disruptions in

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Speaker 2: terms of Tanna's trade, and you know, it is something

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Speaker 2: that may not just be there temporarily. Unfortunately, A lot

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Speaker 2: of our business and exporters look towards the Middle East,

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Speaker 2: especially for agricultural products after last year's tariff announcements for

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Speaker 2: the US only to be hit by that right now.

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Speaker 2: But it is really about finding appropriate alternative markets and

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Speaker 2: market opportunities with some of our friends, and that means

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Speaker 2: some of the traditional partners an alliance as well change

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Speaker 2: as well.

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Speaker 1: So I mean it seems to me the world really

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Speaker 1: is now in a situation where global trade is changing

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Speaker 1: and now the networks need to change as well. Not sure,

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Speaker 1: there are lots of routes to South Africa and around

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Speaker 1: South Africa I think would be fairly safe, but just

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Speaker 1: generally supply chains as a whole, do you expect a

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Speaker 1: period of vulnerability for the next year?

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Speaker 2: Also? Absolutely, And I think we're already seeing that businesses

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Speaker 2: and supply chains are putting efficiency aside just to ensure

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Speaker 2: that they've got certainty. And we've always had efficiency in

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Speaker 2: globalized supply chains. But with a move now towards let's

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Speaker 2: call it more deglobalization and the uncertainty there is, you know,

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Speaker 2: it means that supply chains are also stocking up more

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Speaker 2: and providing more buffer into those supply chains at the

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Speaker 2: cost of efficiency, and that's an additional issue that will

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Speaker 2: impact on price. It's not just the input price, but

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Speaker 2: it's because supply chains will have to put as I say,

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Speaker 2: efficiency aside to ensure a certainty. So there's a whole

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Speaker 2: bunch of issues and costs that I think we will

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Speaker 2: see increasingly in supply chains.

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Speaker 1: Doctor ernstin William thanks so much, Head Lecturer Supply Chain

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Speaker 1: Management at IMM Graduate School, twenty six minutes after six