Shipping Resilience Returns to the Spotlight as Hormuz Closure Triggers Fresh Supply Chain Debate

The closure of the Strait of Hormuz during the ongoing war in the Middle East has revived one of the shipping industry’s most persistent debates: resilience. The concept is back at the centre of industry discussions, with critics questioning why supply chains were not designed to better absorb shocks of this magnitude, and why governments in the region did not invest more heavily in backup infrastructure. Some have even floated the idea of building a canal from the Arabian Sea through the UAE and Oman into the Persian Gulf — a proposal that may sound bold, but is far removed from practical reality.

At first glance, demanding greater resilience from global supply chains seems entirely reasonable. But the issue becomes far more complicated when examined in operational and economic terms.

This is not a new conversation. The same debate surfaced during the pandemic, when supply chain breakdowns triggered widespread calls for more robust logistics systems. Back in March 2021, the argument was already clear: supply chains have evolved around efficiency above all else. Lower costs, leaner inventories and higher utilisation of assets — from vessels and terminals to trucks and warehouses — have long shaped how modern trade operates. Within that model, supply chains are usually resilient enough for everyday disruptions. Their true weakness lies in systemic shocks.

Those systemic risks have never been difficult to identify. They include major earthquakes hitting critical port infrastructure, wars shutting down key maritime corridors, pandemics, geopolitical tensions in strategic waterways such as the South China Sea, and cyberattacks. The problem has never been a lack of awareness. It has been a lack of willingness to pay for protection against events that may or may not happen.

The last five years have only reinforced that point. Since 2021, the industry has faced the Ever Given grounding, the Red Sea vessel attacks that began disrupting Suez Canal traffic in late 2023, drought restrictions in the Panama Canal during 2023 and 2024, and now the closure of Hormuz. Yet despite repeated disruption, very little appears to have changed in terms of structural investment in resilience.

One of the clearest obstacles remains cost. During the peak of pandemic-era freight rate surges, many shippers openly said they were ready to prioritise long-term resilience over short-term savings. But as markets normalised in 2023, much of that willingness faded. It resurfaced briefly during the early phase of the Red Sea crisis in 2024, only to weaken again once supply chains adjusted to longer routings via southern Africa.

That pattern reveals a fundamental truth: in normal market conditions, there is often no viable business case for offering more resilient supply chains. Carriers were heavily criticised in late 2023 for having created excess capacity once again. At the time, nobody wanted to view that excess as a resilience buffer, and many lines slipped into loss-making territory. Yet when the Red Sea crisis deepened, that same overcapacity suddenly became essential.

Hormuz offers a similar example. In theory, resilience could be improved for oil through additional pipeline infrastructure. But for container shipping, the alternatives are far more expensive and far less practical. Meaningful redundancy would require major overland trucking and rail capacity to be built and maintained, even though under normal conditions it would be far too costly to compete with sea freight and would likely remain unused most of the time.

Some observers have criticised Gulf governments for not building that kind of reserve infrastructure in advance. In theory, they could have done so. But by that same logic, one could also ask why the United States has not built an entirely new container port complex to sit idle in case an earthquake disables Los Angeles and Long Beach.

The answer, of course, is obvious. No government is going to build a second LA/Long Beach system just to leave it empty for a crisis that may never come. And that is precisely why the kind of resilience demanded during moments of disruption so often does not exist when it is most needed.

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