The Strait of Malacca is at a breaking point: A global supply chain crisis
29 Aug 20257 min read
Summary
- The Strait of Malacca, a critical maritime artery carrying nearly a quarter of global trade, is under acute stress as ship traffic surges and port systems strain to absorb the volume.
- Geographic bottlenecks in the strait, combined with congestion at Singapore and regional security risks, are causing costly delays that ripple across just-in-time supply chains — especially in sectors like EV manufacturing.
- While regional governments are investing in port upgrades, more real-time tracking tools and digital routing, the article warns that without deeper cooperation and infrastructure scaling, this chokepoint could undermine Asia’s long-term trade resilience.
The Strait of Malacca, one of the world’s busiest shipping lanes, is reaching a breaking point. Stretching roughly 800 kilometers between Indonesia and the Malay Peninsula, this narrow passageway connects the Indian Ocean to the South China Sea and funnels nearly a quarter of the world’s traded goods—everything from oil and coal to palm oil and car parts.
Its importance is immense. It links major production hubs in Asia to markets in the Middle East, Europe, and beyond. But with traffic hitting new highs and port systems straining to keep up, global trade is starting to feel the pressure.
A Shortcut Under Stress
Serving as the shortest maritime route between the Indian and Pacific Oceans, the Strait of Malacca is a vital artery. In 2024, the strait recorded a new all-time high of 94,301 transiting ships—a 5.5% increase from the previous year. In 2023, the strait carried around 23.7 million barrels of oil per day, surpassing the Strait of Hormuz as the world’s largest oil transit route.
Southeast Asia’s Supply Chain Boom
As Southeast Asia’s economies expand, the pressure only mounts. Vietnam, Indonesia, and Malaysia are becoming manufacturing powerhouses, producing electronics, EV components, textiles, and more. And most of their goods flow through the Strait of Malacca.
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