Allan Rutter: 00:14
Howdy everyone, welcome to Thinking Transportation, conversations about how we get ourselves and the stuff we need from one place to another. I’m Allan Rutter with the Texas A&M Transportation Institute.

Allan Rutter: 00:28
In many of my elementary school classrooms, I can remember a globe somewhere. The most prominent color was the green or blue that represented the oceans, and there was a lot of it. When it comes to sailing across something so big, it turns out that ships follow basically the same routes. Today we’re going to talk about what happens when those ocean and coastal routes get interrupted by natural or manmade forces. Before we get started, a quick note for our listeners. Today we’ll be discussing the impacts of recent global disruptions on ocean shipping and those effects on major supply chains. This is not a podcast about politics or military affairs, so we won’t be discussing why these disruptions are happening or for how long. We’ll talk about how disruptions across the globe are affecting shipping routes, energy flows, and operations at U.S. ports and waterways. Today I get to talk to a return guest, Vince Mantero, the director of TTI’s Center for Ports and Waterways. We’ll include a link to the previous episode where he took over the center’s leadership, as that podcast allowed him to introduce himself more fully. Vince, thanks for joining us today on the podcast.

Vince Mantero: 01:48
Great to join you, Allan. Looking forward to the discussion.

Allan Rutter: 01:48
So as we look across global shipping, there are multiple disruptions happening which seem to be layering on top of each other. From your perspective at the Center for Ports and Waterways, how should we understand what’s going on?

Vince Mantero: 02:03
Well, you’re right. When you step back, these disruptions really start to stack up. And before we get into specifics, it’s worth remembering that the ocean isn’t this wide open, go anywhere space. You know, global shipping actually moves through a surprisingly small number of lanes, almost like highways at sea. So when one of those highways gets blocked or threatened, there aren’t many detours. So I would say this moment is best understood as a system-wide shock, affecting, I would say, three major choke points at the same time. The first is the Strait of Hormuz, which has been in the news. It’s the entry into the Persian Gulf. The second is the connection of the Gulf of Aden to the Red Sea, leading to the Suez Canal, and finally the Panama Canal. So the Strait of Hormuz handles most of the world’s largest flows of crude oil and liquid natural gas or LNG. The Red Sea and the Suez Canal are the main Asia-Europe artery. And the Panama Canal is really that Atlantic-Pacific balancing valve. So when each of these comes under strain, you know, global shipping loses flexibility and resulting in longer routes, higher costs, and reduced schedule reliability.

Allan Rutter: 03:20
So how unusual is the current level of disruption?

Vince Mantero: 03:25
Well, I would say exceptionally unusual. In March, vessel traffic through the Strait of Hormuz has fallen to only a handful of ships, with some days seeing zero movement compared with typical daily flows of, geez, well over 100 vessels. Satellite and carrier data confirmed this dramatic collapse in normal activity. And historically, there had been early disruptions, but they’ve only removed a small share of global oil flows. Today’s situation really affects a quarter that normally carries roughly one-fifth of global petroleum supply. And this disruption is several times larger than earlier shocks.

Allan Rutter: 04:05
That would explain why everybody’s so alarmed by it. Let’s start with the Strait of Hormuz. What’s going on there?

Vince Mantero: 04:14
Well, the strait usually moves close to 20 million barrels of oil per day. And so after the strikes and security warnings, major carriers– including Maersk, MSC, HayPAC Lloyd, and CMA CGM– they all suspended transits and they forced oil and LNG vessels to anchor or even to divert around much longer routes.

Allan Rutter: 04:38
So this volatility in the oil market is affecting prices of the commodity and commodity futures. Domestically, prices of gas and diesel have also jumped sharply. Is that connection emotional or something real?

Vince Mantero: 04:55
You know, there’s always some market psychology or emotion, but I would say the spike is really driven mainly by physical constraints. Long-haul tanker rates from the U.S. Gulf Coast to Asia have surged, more than doubling. And they’ve reached some of the highest levels in years, which directly raises those delivered fuel costs. But I would say it’s not just energy. These disruptions are spilling into agriculture too. The Red Sea and the Suez Canal instability has slowed grain shipments from the Black Sea region southbound through the Suez Canal into the Middle East and North Africa. And detours around the Cape of Good Hope, which is on the southern tip of Africa, have been adding 10 to 14 days to transit time and also raising transport costs.

Allan Rutter: 05:43
You just mentioned movement through the Suez and the Red Sea. We’ll talk a little bit more about that in just a moment. But you mentioned that in addition to oil, constraints on vessels carrying liquid natural gas or LNG. Tell us more about that particular commodity movement.

Vince Mantero: 06:02
Well, LNG flows have tightened sharply. You have the Ras-Lafon facility in Qatar. It’s one of the world’s most important LNG hubs. And it’s experienced operational disruptions, and carriers have suspended Hormuz transits due to risk and insurance constraints. Europe and Asia have increasingly turned to the U.S. Gulf Coast LNG as a substitute.

Allan Rutter: 06:27
Good news for the Gulf Coast of Texas, not good news for just about anybody else. Right. You mentioned constraints on grain shipments from Black Sea ports, but I’m also reading that Middle East energy also fuels production of ammonia and other nitrogen-based fertilizers along the Persian Gulf. Are we seeing impacts beyond energy into fertilizer and other agricultural inputs?

Vince Mantero: 06:53
Oh, absolutely. I mean, fertilizer shipments have been disrupted as well. Disruptions near Hormuz have held up fertilizer vessels, raising concerns among agricultural groups throughout the northern hemisphere about timing and availability during these planting seasons. Almost a third of global seaborne fertilizer trade moves through the Strait of Hormuz.

Allan Rutter: 07:15
Wow. So I can understand why the focus on this particularly narrow strip of water that goes in and out of the Persian Gulf.

Vince Mantero: 07:23
Right.

Allan Rutter: 07:24
Now, given U.S. oil production, which we in Texas are very much well aware of and brag about, why can’t we offset these impacts?

Vince Mantero: 07:33
Well, simply because the U.S. is part of a global market. Let’s say Asian refiners lose Middle Eastern supply, they then pivot towards U.S. Gulf Coast, which bids up prices here at home as well. And at the same time, as Qatar’s LNG volumes fall, more global buyers turn to U.S. LNG, which again tightens domestic natural gas balances, too. And on the petroleum side, it’s important to remember that the Gulf Coast refineries are configured for heavier crude, much of which still comes from Canada and Mexico. So even though we produce a lot of light crude domestically, we still import those heavier barrels. So when global oil prices rise, the cost of those imported barrels rise too.

Allan Rutter: 08:19
So it sounds like part of what we’re talking about today is the extent to which everything is interconnected on those narrow sea lanes across our vast oceans.

Vince Mantero: 08:29
Absolutely, absolutely.

Allan Rutter: 08:31
We’ve been talking about one major water connection into the Middle East, the Persian Gulf. Let’s get back to that other connection, the Red Sea and the Suez Canal. What’s been happening there and for how long?

Vince Mantero: 08:44
Well, for a number of years, Middle Eastern instability has really increased risk for this Asia-Europe container traffic through the Suez. And those container movements are down significantly, and not a surprise. Many carriers continue to reroute again around the Cape of Good Hope. Again, these add a week or two to Asia-Europe voyages. Even limited return attempts have been reversed due to resumed attacks and this elevated risk.

Allan Rutter: 09:13
So are container carriers now treating the Cape route as the new normal?

Vince Mantero: 09:19
You know, I would say increasingly yes. After repeated disruptions back in ’24, and obviously this year, many carriers are now planning their schedules around the Cape as the safer, more predictable default.

Allan Rutter: 09:31
Yeah, it’s crazy to think about the Cape of Good Hope as a dependable routing when you think about the history of maritime. Does this affect more than containers, though?

Vince Mantero: 09:42
Oh, yeah, absolutely. I mean, rerouting adds long distances for grain, for fuel, for LNG shipments. And data from the, I think it was the UN Conference on Trade and Development and even other industry assessments show ships traveling much further for the same loads. And this increases ton mile demand. And finally, it raises system-wide costs.

Allan Rutter: 10:07
So, because global shipping operates as a connected system, and that’s going to be a common theme through our conversation, those longer detours you’ve just talked about don’t just affect Europe and the Middle East. They ripple across Asia as well, including some of the world’s busiest maritime corridors.

Allan Rutter: 10:24
Let’s talk a little bit about Asia. The Strait of Malacca between Singapore and Indonesia. Tell us a little bit about that and its connection to the South China Sea.

Vince Mantero: 10:36
Well, the Straits of Malacca and Singapore continue to remain one of the busiest corridors linking basically the Indian Ocean to the South China Sea. You know, it’s already a tight, narrow passage in normal conditions. And traffic has become even more concentrated as ships reroute around the Red Sea. And so that added volume reduces flexibility on the strait and increases pressure, really on one of Asia’s most important maritime corridor and one of its choke points.

Allan Rutter: 11:06
I’ve also read that the Taiwan Strait between mainland China and Taiwan is also a major marine route. What more can you tell our listeners about that?

Vince Mantero: 11:17
Yeah, so the Taiwan Strait– and again, it’s only about 80 miles across its narrowest point–it’s a major route for raw materials and energy to China, to South Korea, and to Japan. It’s also the major route for container shipping for Chinese ports. You know, aside from Singapore, the other two of the three busiest container ports in the world are in China, north of the strait. So the strait is a major shipping crossroads.

Allan Rutter: 11:44
Okay. Let’s shift across the ocean for just a minute. You mentioned at the start of our conversation three major choke points: the Strait of Hormuz, the Red Sea, and the Suez Canal. Let’s talk about the Panama Canal. How does that fit into all of these matters?

Vince Mantero: 12:00
Yeah, so the Panama Canal is constrained by drought, and that limits how many ships can transit each day. And then that alone tightens global routing options. On top of that, earlier this year, Panama’s Supreme Court annulled CK Hutchins’s longstanding port concessions at the Balboa terminal on the Pacific side and the Kriegsabog terminal on the Atlantic side. And so to keep operations stable, the government assigned APM terminals and Terminal Investment Limited to run them on an interim basis while a new concession process is developed. You know, I only mention this because this created uncertainty around operations and also complicates C.K. Hutchins’ proposed global portfolio sale. You know, stable terminals matter because they anchor global rerouting decisions. When choke points like the canal are strained, carriers look for reliability anywhere they can find it. But uncertainty around terminal operations adds a whole nother layer of friction to an already stressed system.

Allan Rutter: 13:04
Now, we’ve been talking a lot about global shipping of materials involved in energy and agriculture and components and products that move in intermodal containers. All of this is part of supply chain management, which is defined as the strategic end-to-end coordination of planning, sourcing, manufacturing, logistics, and returns to transform raw materials into finished goods and to deliver them to customers. It optimizes that across an entire network from suppliers to final consumption to maximize value, minimize cost, and improve efficiency. Or at least that’s how it’s all defined. As the final stage of our supply chain discussion of shipping disruptions, let’s consider the real test of resilience that shows up in ports and waterways that keep the U.S. economy, especially along the Gulf Coast. How are these disruptions showing up or affecting Texas ports?

Vince Mantero: 14:06
Yeah, that’s a great question. I mean, Texas is at the center of this global rebalancing. Texas ports –especially Houston, Corpus Christi, Freeport, Port Arthur, Texas City, and even Sabine Pass –serve as major energy export gateways. When Middle Eastern supply becomes unreliable, Asian refiners turn to U.S. Gulf Coast crude, and they tighten schedules and they raise traffic levels. And with Qatar’s LNG output constrainted, global buyers have increased demand for U.S. coast’s LNG.

Allan Rutter: 14:41
So how does this affect the domestic side?

Vince Mantero: 14:44
Well, domestically, you know, the vulnerability isn’t usually about Texas port capacity. These are high throughput gateways built to handle large volumes of crude LNG chemicals, dry bulk, and containers. I think the real constraint shows up in those inland links that feed the port. As we saw in the 25 floods, that was made clear when highway and rail access to, for example, Corpus Christi, Houston, and Galveston were temporarily severed. These delayed exports and slowed more than 25 million tons of dry bulk and essential materials, those facilities move each year. And you know, there’s been progress since then. Galveston has been completing major repairs. Corpus Christi finished its ship channel upgrade in 2025. And the region continues to invest in improving drainage, rail access, and highway resilience after the storms. But you know, those floods made it clear how dependent port operations are on the inland road and rail corridors that feed them. These corridors still face vulnerabilities. And that could be from severe weather, could be high congestion, or even aging infrastructure. And that really creates operational pressure, even when the ports themselves are ready. So I would say when global choke points tighten, any inland disruption in Texas can also quickly amplify system-wide delays.

Allan Rutter: 16:09
It sounds like whatever’s going on within Texas is connected to what’s going on in the rest of the world.

Vince Mantero: 16:16
Absolutely.

Allan Rutter: 16:17
Let me ask you to put on your global shipping wizard hat and warm up your crystal ball. Do you see these disruptions as temporary or are they more structural? And you know, you won’t be graded on this. And if, of course, if you could predict that, you’d be out in the stock market.

Vince Mantero: 16:35
Yeah, I think so. All right, I’ll put on my my wizard hat. And I’m looking into that crystal ball, and I see it as a rare moment when, you know, several of the world’s critical corridors are stressed at the same time. And to answer your question, I’d say these disruptions may be more structural than temporary. I mean, analyses have shown ships traveling significantly farther for the same cargo volumes; you know, a sign that longer routes could persist until these global choke points stabilize.

Allan Rutter: 17:09
Yeah, that’s certainly the case for what you described about rerouting longer transits around the Red Sea and Suez. That’s been going on for years, and people have managed to figure out “we’ll just put up with the increased costs.”

Vince Mantero: 17:24
Right.

Allan Rutter: 17:26
So as we think about what’s going on next, what would be indicators or signals or flags that we should look for that help us understand when things might be getting better?

Vince Mantero: 17:39
Yeah, so I would look at maybe three key indicators. Number one, we’ve talked about a little bit, is the number of vessels going through the Strait of Hormuz. If that doesn’t change, then we realize where things are. The other one is any routing patterns through the Red Sea. Again, I refer back to what we talked about versus the Suez and the Cape of Good Hope. Are we still seeing that routing pattern going south? And finally, I would say look at the water levels and the availability of slots in the Panama Canal. Again, I think that’s one of the key indicators. I would say also keep an eye on the Strait of Malacca because traffic density there often tells us how carriers are adjusting when other choke points tighten. And more broadly, I would also say conditions in the Taiwan Strait matter too. It continues to be one of Asia’s busiest corridors. So, you know, any change in traffic patterns there is another signal of stress in the system. So together, all of these reveal the real-time stresses on the global maritime system.

Allan Rutter: 18:47
So I can imagine sort of we’re at the bridge of a the global shipping ship, and these are our dials that we’re going to be keeping an eye on to let us know whether sailing will be smoother or it’s going to be rougher seas ahead.

Vince Mantero: 19:01
Exactly.

Allan Rutter: 19:04
Before we wrap up, for listeners who aren’t in the maritime world, how does this matter to us? How does this matter to somebody who’s listening who doesn’t follow this stuff all the time?

Vince Mantero: 19:14
That’s a great question. So we’ve gone around the world, but I would say the impacts are local. Global shipping is invisible until something goes wrong, and then we all feel it. Almost everything we rely on fuel, fertilizer, food imports, consumer goods, industrial materials. These move through just a few maritime corridors. And when those corridors come under pressure, even far from home, it shows up here as higher prices, longer waits, and less predictable supply. But, you know, the takeaway isn’t that everyone needs to follow shipping news. It’s recognizing that the system we depend on isn’t automatic. And that resilience comes from a mix of things. Part of it is stronger infrastructure, invest in ports and waterways and rail and highway links that keep cargo moving, even when global routes get strained. But resilience also comes from better coordination, more transparent data, and giving supply chains that flexibility to absorb these shocks without breaking. So when we understand how these supply chains really work, we’re in a better position to act early instead of reacting late. And that difference between proactive and reactive is what really helps consumers, businesses, and communities get through these periods of disruption without being caught off guard.

Allan Rutter: 20:38
Yeah, it strikes me that hearing about that, the importance of strengthening freight networks multiple modes, that’s the very thing that our partners of the Texas Department of Transportation are involved in right now. They are in the process of updating what is called the Texas Freight Mobility Plan. Congress expects these plans to be redone every four years. And TxDOT is in the process, as we release this episode, of conducting some workshops, particularly aimed at private sector stakeholders, to gain input on what kinds of corridors matter the most to your industries. And so part of what you’ve helped us understand today, Vince, is how Texas freight is connected to that worldwide network and what kinds of things need to be considered and planned for. So as you talk about the importance of planning for the future, the good news is that here locally, Texas Department of Transportation, who has had a track record of really excellence in freight planning, is underway in an update of getting ready for adjusting our freight plans to fit this future.

Vince Mantero: 21:54
Yeah, absolutely. I echo those comments. I think Texas and TxDOT clearly understand. The importance of freight and freight movement to the economy. They understand the importance of their ports. They understand the importance of the connectivity to the ports. And I agree with you between the Texas Freight Mobility Plan, the work of the Texas Freight Advisory Committee, I think they really are on the forefront of really tackling these issues and understanding the importance of freight for the state. So I agree with you.

Allan Rutter: 22:28
So, Vince, you’ve really helped us understand a whole lot about global shipping and how it matters to us. Clearly, this is something that’s important to you. Tell us a little more about what gets you to work every day.

Vince Mantero: 22:41
Well, first and foremost, it’s the people. I get a chance to work with you, Allan, and all our colleagues. It’s just exciting to kind of bounce ideas off each other, talk about these issues. But I am proudly kind of modally agnostic in many ways. I love talking about freight transportation. I love talking about how all these pieces interact. I love to talk about kind of, well, why is rail important to highways, to important to maritime? What about our waterways? So, you know, the more I get a chance to talk about this and everybody’s dependency on each other and the overall supply chain, that’s really what brings me in each day. It’s not solely focused on kind of one mode, one silo. It’s really talking about the system as a whole and how it really impacts all of us and why it’s important to talk about that.

Allan Rutter: 23:37
Well, we’re glad you’re here with us. We’re glad you’re part of the freight team at TTI, and we really appreciate you spending time with us today.

Vince Mantero: 23:45
Thank you, Allan. Thank you for having me on again. It was a pleasure.

Allan Rutter: 23:50
Before they had satellites for positioning and weather, mariners navigated by the stars and looked to the sky for signs of changes in the weather. Amidst so much confusion and world affairs, today we may struggle to find our way or predict the future. Vince helped us look for signals and signs in the chaos to help us know when things are looking better for our global supply chain. Thanks for listening. If you liked what you heard or learned something, please take just a minute to give us a review, subscribe, and share this episode. I invite you to join us next time for another conversation about getting ourselves and the stuff we need from point A to point B. Thinking Transportation is a production of the Texas A&M Transportation Institute, a member of The Texas A&M University System. The show is edited and produced by Chris Pourteau. I’m your host, Allan Rutter. Thanks again for joining us. We’ll see you next time.