Three weeks ago, Mintesinot Lemma, the general manager of Mintu Plast Plastic Raw Materials Production Plc, imported 22 shipping containers of plastic raw materials from Oman. What should have been a three-day journey turned into a month and a half, as the vessels changed routes navigating the treacherous waters.

"Everything has changed," he told Fortune.

Mintesinot highlights the far-reaching impact of changing routes, citing additional shipping costs, delays in settling payments with banks for letters of credit, and disruptions to production schedules. He elucidated that despite the raw material costs increasing from around 1,000 dollars to 1,350 dollars for a ton in recent shipments, the supply remains only sufficient for a 45-day production cycle.

With 12 years of operation, Mintu Plast specialises in producing up to 10tns of Polyethylene terephthalate (PET) preforms, bottle caps, and PolyVinyl Chloride (PVC) compounds daily, serving various sectors. Water bottlers represent the largest portion of the Company's market share.

"Recent rise in bottled water prices can be attributed to this," Mintesinot remarked, referring to the five Birr increase observed over the past few weeks.

Missile attacks by Houthi militants on vessels in the Bab al-Mandeb Strait, a strategic passage near Yemen, have disrupted over 30pc of the global container trade that transits through the Suez Canal, a crucial link between the Red Sea and the Mediterranean. The recent attack on a U.S. ship took place a couple of weeks ago. The disruption has posed significant difficulties to the international flow of goods and has exacerbated inflationary concerns, particularly for African countries.

Average freight costs have surged by nearly 1,500 dollars for a container over the past few months, nearing levels reminiscent of the COVID-19 pandemic, as ships are compelled to navigate longer routes. This surge is corroborated by the World Container Index, which has soared by 151pc since early October 2023, with rates between Asia and Europe experiencing an alarming 284pc increase.

The profound impact of the Red Sea crisis on global trade, particularly for countries heavily reliant on maritime transportation routes like Ethiopia, has become apparent. For the past two decades, Djibouti ports have served as the primary entry point for goods destined for landlocked Ethiopia, boasting a total of 18 berths. Out of the 7.6 million tons of freight goods transported in the first half of this year, an overwhelming 95.1pc transited through Djibouti which relies heavily on the Suez Canal that facilitates nearly 30.6pc of its trade volume.

The chaos has inflicted severe damage on Ethiopia's commodity exports, with coffee bearing the brunt of the impact. Over 3,000tns of coffee are currently stranded in Djibouti ports, awaiting container ships amidst soaring insurance premiums, which have surged by as much as 2,000 dollars.

Demurrage costs are identified as the primary concern, exacerbating the challenges faced by exporters. The heightened risk of defaults on sales contracts due to the shipping crisis has led to uncertain delivery schedules and additional costs for buyers.

Pulses and oilseeds have fared no better, according to Edao Abdi, president of the Ethiopian Pulses, Oil Seeds & Spices Processors-Exporters Association (EPOSPEA). He expressed concerns about losing customers to competitors in countries unaffected by the crisis, owing to the additional costs associated with importing from East African ports. Edao emphasised that even a modest increase of 100 dollars a ton could significantly influence demand.

"Our competitors will exploit this," he warned.

The Suez Canal, which boasted a record revenue of 9.4 billion dollars in 2023, has been particularly hard-hit by the ongoing crisis. Serving as the primary conduit for 95pc of trade between Europe and Asia, the canal's significance cannot be overstated. According to the UN Conference on Trade & Development (UNCTAD), monthly transits through the Canal witnessed a sharp decline of 37pc year-on-year in January 2024.

Elsabeth Getahun, president of the Ethiopian Freight Forwarders & Shipping Agents Association and CEO of Pan Afric Global, emphasised that all countries bordering the Red Sea corridor have felt the impact. She disclosed that exploratory efforts are underway to use alternative ports in Mombasa or Lamu in Kenya while still leveraging Djibouti ports, as part of the evolving strategy of her 31-year-old company.

"Temporary solutions are paramount," Elizabeth told Fortune.

Pan Afric is among the three logistics companies recently granted regulatory approval to become one of the first privately owned multimodal logistics operators. Elsabeth underscored the global scale of the crisis while expressing hope for its eventual resolution.

"It [Red Sea route] has been severely compromised," she said.

However, amidst these losses, some African ports are experiencing a surge in traffic. Port Mombasa in Kenya, in particular, has garnered increasing attention from Ethiopian authorities. It has seen heightened activity to and from ports in the Persian Gulf as more vessels opt for the Cape Hope route.

Meeting the logistics needs of Ethiopia's 120 million population, spread across a land area of around 1.12 million square meters, calls for diversified port alternatives, regardless of global shipping crises. Abdulber Shemsu, director of the Ethiopian Maritime Authority, underscores the importance of developing logistics capabilities in all directions to mitigate the sensitivity of trade flow disruptions.

"We've not been uniquely impacted thus far," he told Fortune.

Abdulber noted that Ethiopian ships have not been targeted in attacks thus far, with only one shipping liner suspending operations toward exposed ports. Despite major ocean carriers such as Maersk, Hapag-Lloyd, and MSC suspending Red Sea transits and warning clients of prolonged disruptions, Abdulber characterises Ethiopia as being at the receiving end of a global geopolitical deadlock.

He highlights the use of the Lamu port in Kenya, reflecting on its initial establishment to primarily serve the needs of South Sudan and Ethiopia. Currently capable of managing a 28tns weight per container, Abdulber notes the government's lead in importing fertiliser through the port. He anticipates that ongoing road expansions and harmonisation of transport standards between the two countries will position Lamu as a viable port alternative in the near term.

Frustrated with minimum invoice requirements from Djibouti ports in October of last year, some foreign-owned manufacturing companies have already begun diverting their inputs through the Mombasa port.

Hibret Lema, head of the investor association in Hawassa Industrial Park, reveals that most manufacturers are now paying 2,000 dollars for a 40ft container to import inputs through the Kenyan alternative. He stresses that the time-sensitivity of most products has compelled exporters to opt for longer routes to meet delivery quotas, despite encountering new hurdles imposed by customs officials and transport authorities.