Systemic impacts of disruptions at maritime chokepoints

Abstract

Global trade relies on a small number of strategic passageways, so-called maritime chokepoints, which are vulnerable to disruptions. Yet, the exposure of countries to these disruptions has not been comprehensively assessed, inhibiting adequate preparedness. Here, we quantify the systemic impacts of maritime chokepoint disruptions subject to a variety of hazards, both natural and human-induced. The expected value of trade disrupted at chokepoints is estimated to be USD192 billion annually, mainly attributed to geopolitical risk at the Taiwan Strait and Suez Canal, and a combination of hazards affecting the Bab el-Mandeb Strait. We estimate the economic losses of chokepoint disruptions, due to delays, rerouting, insurance premiums and trade disruptions, to be USD10.7 billion per year, and an additional USD3.4 billion per year due to increased freight costs. In both cases, risks to the Suez Canal and Bab el-Mandeb Strait drive these losses. Countries most affected are in the vicinity of these two chokepoints, but also further away, including countries in Western Africa and Central Asia. At a time of heightened geopolitical tensions and climate change, our results help to quantify the implications of these risks and can present a useful starting point to identify resilience interventions to mitigate these threats.