From the Red Sea to a small business’s orders: a decision before stock runs out.
By 15 January 2024, Red Sea attacks had prompted Maersk to divert services. In this demonstration case, an Italian small business has three weeks of garlic stock and an Asian shipment due in six weeks. It must cover orders without choosing an alternative exposed to the same route.
Relevant engagement: Executive Risk Brief
Decision
Which bridge arrives before stock runs out, avoids dependence on the exposed route and retains one week of reserve within the purchase expenditure limit, with a supplier that can be qualified and verifiable contractual terms?
The inputs before the calculation
- Usable opening stock
- 30 t
- Orders to cover
- 10 t per week
- Asian cargo already purchased
- 60 t · 26 February, after 6 complete weeks
- Desired reserve
- 1 week of demand · 10 t in the baseline
- New purchase limit
- €110,000
- Egypt baseline landed price
- €2.55/kg
- Proposed Egyptian deliveries
- 20 t on 29 January and 20 t on 12 February
Simulated assumptions as at 15 January 2024. The limit concerns the new purchase: advances, VAT, receipts and other commitments require a separate company cash assessment. Product, lots and dates remain to be confirmed.
The decision also concerns who produces the goods, who controls the supplier and who moves the cargo. The scope covers ownership, institutional relationships, counterparty integrity, lot availability, landed cost and contractual terms. Data, certificates and possible constraints on strategic assets are examined before capital is committed or access granted.
Evidence
This is not a generic logistics delay. An attacked vessel, suspended transit, a UN resolution and strikes on Houthi targets change the security assessment, but do not establish when carriers will return to the route. For the company, the decision made for its booked service is what matters.
30 December 2023
Maersk Hangzhou is hit after passing through Bab el-Mandeb; an attempted boarding follows.
The threat affects the vessel, crew and continuity of service.
Maersk, advisories of 31 December 2023 and 5 January 2024; incident of 30 December5 January 2024
Maersk announces that vessels scheduled for the Red Sea will divert around the Cape of Good Hope.
The arrival of the existing order must be recalculated against its actual voyage.
Maersk, advisories of 31 December 2023 and 5 January 2024; incident of 30 December10 January 2024
The UN Security Council demands an immediate end to attacks on merchant vessels.
It is an institutional signal, not confirmation that the route is safe again.
UN Security Council, resolution 2722 (10 January 2024)12 January 2024
The United States and United Kingdom strike Houthi targets in Yemen.
The military response adds a further escalation variable to monitor.
UK government, response to Red Sea attacks (12 January 2024)
In the case, 30 tonnes of stock against weekly orders of 10 tonnes would run out after three weeks without intervention. The Asian shipment arrives in week six. The required bridge is 40 tonnes, including one week of reserve stock.
The timetable before and after each delivery
Before the lot: 20 t; lot received: 0 t; after the lot: 20 t.
Before the lot: 10 t; lot received: 20 t; after the lot: 30 t.
Before the lot: 20 t; lot received: 0 t; after the lot: 20 t.
Before the lot: 10 t; lot received: 20 t; after the lot: 30 t.
Before the lot: 20 t; lot received: 0 t; after the lot: 20 t.
Before the lot: 10 t; lot received: 0 t; after the lot: 10 t.
Demand for each interval is consumed before the lot received on the stated date. Deliveries on 29 January and 12 February follow two and four complete weeks from 15 January and mean usable warehouse stock after entry and checks. The Asian cargo is excluded from the balance. The baseline minimum before deliveries is 10 tonnes: there is no shortfall. A positive balance after an arrival does not erase an earlier interruption.
Analysis
The calculations show the consequences of assumptions, not independent confirmation of the case. The cost comparison, dossiers and simulated interviews would require their own evidence in an actual engagement; they do not attest an investigation already carried out.
Red Sea attacks
Attacks on commercial shipping make passage through the Red Sea uncertain.
Route security becomes part of the purchasing timetable.
Ships divert around Africa
On 5 January, Maersk announces that vessels scheduled through the area will divert around the Cape of Good Hope.
Country of origin is not enough: the booked service and its route matter.
Cargo arrives after 6 weeks
In the case, the previously ordered Asian shipment has a revised arrival six weeks after 15 January.
This cargo cannot cover orders in the intervening weeks.
Stock lasts 3 weeks
Thirty usable tonnes against demand of ten tonnes a week provide three weeks of cover.
Without a bridge purchase, stock would run out before the revised arrival.
Orders need another 30 t
Between the end of initial stock and the Asian arrival there are three weeks of demand, or thirty tonnes.
To retain one additional week of reserve, the bridge must be forty tonnes.
Compare 3 responses
Wait for the existing Chinese order, buy two Egyptian lots or use the Atlantic route from Argentina. Only Egypt arrives before the uncovered window, if its service is confirmed.
The useful alternative arrives before a potential stock-out without reproducing the same route dependency.
Buy 40 t in 2 deliveries
The simulated choice is an Egyptian bridge: twenty tonnes on 29 January and twenty on 12 February, subject to lot checks.
Orders remain covered and ten tonnes of reserve stock remain in week six.
Due diligence distinguishes the supplier from its country.
The dossier traces the chain to beneficial owners, connected companies, directors, intermediaries and the payment beneficiary. Corporate registers, original documents, court records and sanctions lists are compared for identity, date and reliability. A name match or unverified report is not treated as a finding; each gap has an explicit effect on the decision.
China
In the simulated dossier, an indirect holding links the supplier to a municipal investment company. Funding, warehouse access and logistics priority also depend on local public bodies. Institutional ties do not establish wrongdoing, but require an assessment of who can change capacity, terms and supply continuity.
The simulation includes a discussion with a contact in Qingdao’s municipal administration about the operator, infrastructure and local permissions. The interview note separates statements, the contact’s remit and unconfirmed points; it is checked against registers and documents. It does not replace a licence, carrier confirmation or independent evidence.
The existing cargo remains in the week-six plan. Further volumes require checks on corporate control, signing authority and the bank beneficiary, with exit terms if permissions or local priorities change. The identified dependency enters the comparison with alternative suppliers.
Argentina
In the fictional dossier, ownership tracing connects the beneficial owner to a company controlled by people convicted of organised crime. The link is assumed to be corroborated by corporate registers and court records within the simulation. It concerns this counterparty, not Argentine suppliers generally.
The analysis checks identities, holdings and the chronology of records, distinguishes convictions from pending proceedings and examines intermediaries, the receiving bank and potentially sanctioned parties. An isolated press report would require further investigation and would not support the same conclusion.
Management excludes the offer on integrity grounds, before considering its late arrival and the €118,000 required for 40 tonnes. It authorises no advance payment and does not bypass the issue through another intermediary; legal counsel assesses any applicable obligations.
Egypt
The Egyptian offer can meet the deadline, but declared availability is not verified capacity. The dossier separates producer, exporter and logistics operator, checking ownership, available accounts, verifiable references and title to the proposed lots.
Evidence is required on warehouse stock, the identity of both lots, origin and quality documents. For the supplier’s claimed fleet, vehicle or vessel identifiers, owner, operator, insurance and actual availability are requested. Corporate and transport documents must refer to the same counterparties as the contract.
No payment is made on a delivery promise alone. The baseline uses an independent carrier and two identified lots; the order and advance remain conditional on counterparty qualification, capacity booking and entry checks.
Methods applied to this case
The framework selects methods relevant to the decision. This case demonstrates requirements, expenditure, cover and sensitivity conditional on assumptions; dossiers and cost breakdowns illustrate work to document within an engagement. It does not attest execution of the entire method register, calibrated probabilities, ROI or a complete company cash forecast.
Actor and escalation-signal analysis
Attacks, the UN resolution and military response are not treated as a sequence that guarantees reopening: carrier advisories still govern the shipment.
Causal dependency mapping
The chain links threat, diversion, arrival and orders. It also calls for checking the Egyptian lot’s vessel and trans-shipments: a different origin can share the same exposure.
Scenario and alternative analysis
Waiting for the Asian cargo, the Egyptian bridge and the Atlantic route are compared by what they can cover before week three, not just by cost per kilogram.
Corporate and relationship due diligence
Ownership, beneficial owners, institutional ties and court-record findings are distinguished by evidence and consequences. The simulated municipal interview enters the dossier with explicit limits; the Argentine counterparty is excluded on integrity grounds.
Cost reconciliation and conditions assessment
Product, transport, insurance, entry and delivery are compared on the same volume. Supplier fleet, independent carrier and sea-road transport are assessed alongside certificates, data, contract and golden power scope.
Sensitivity analysis
A seven-week wait requires 50 tonnes; weekly orders of 12 tonnes require 54; both changes together require 66. These scenarios have no assigned probabilities and require new lots, delivery dates and cash checks.
Alternatives
The UN resolution and strikes on Houthi targets are public responses to the threat, not a reliable date for the return of Red Sea transit. In this case, the Chinese cargo has already been purchased: it is not a new supplier to select. The decision is whether to wait, buy a timely bridge or rely on another route that still arrives too late.
Egypt
Potential bridge. Arrival: week 2. Assumed landed cost: €2.55/kg.
In the case, garlic is already available and the supplier offers two deliveries on a Mediterranean service. The first lot is assumed to arrive on 29 January, after two complete weeks from 15 January, before stock runs out. The vessel and any trans-shipment must be confirmed to avoid the Red Sea.
China
Existing order. Arrival: week 6. Assumed landed cost: €2.35/kg.
The existing cargo diverts around the Cape of Good Hope and is due on 26 February, after six complete weeks, when opening stock has already run out. Another lot on the same service would cost less but would not cover orders in the meantime.
Argentina
Alternative arriving too late. Arrival: week 5. Assumed landed cost: €2.95/kg.
The Atlantic route would avoid the Red Sea if the booking confirms it. Arrival in week five is still too late for uncovered orders; 40 tonnes would also exceed the purchase limit. Due diligence also excludes the fictional counterparty because of the criminal links assumed in the simulated dossier.
The same volume, five cost configurations.
The comparison normalises all configurations to 40 tonnes delivered to the Italian warehouse. The Egyptian baseline retains its €2.55/kg cost: €102,000. All bars share the same scale, up to €118,000. The supplier fleet’s saving matters only if capacity, route and coverage are evidenced.
Egypt · independent carrier
- Product
- €70,000
- Transport
- €14,000
- Insurance
- €3,200
- Entry and checks
- €8,800
- Delivery and handling
- €6,000
Assumed baseline: capacity on a Mediterranean service still to be booked, with itinerary and responsibilities to be checked independently of the seller. Proposed lots of 20 tonnes on 29 January and 20 tonnes on 12 February, usable in the warehouse after entry and checks.
Egypt · supplier fleet
- Product
- €70,000
- Transport
- €10,000
- Insurance
- €3,200
- Entry and checks
- €8,800
- Delivery and handling
- €6,000
Assumed saving of €4,000 against the independent carrier. Fleet ownership, operation, insurance and capacity still require verification; the same arrival date is a promise, not a confirmed booking.
Egypt · sea and road
- Product
- €70,000
- Transport
- €18,000
- Insurance
- €3,200
- Entry and checks
- €8,800
- Delivery and handling
- €8,000
Alternative port and final road leg: €6,000 above the baseline. Slots, connections, responsibility transfers and storage conditions must allow first arrival before week three.
China · service via the Cape
- Product
- €60,000
- Transport
- €16,000
- Insurance
- €4,000
- Entry and checks
- €8,000
- Delivery and handling
- €6,000
€94,000 for an equivalent 40 tonnes: a cost comparison, not a planned second order. The existing Asian order remains 60 tonnes; arrival in week six does not bridge the gap.
Argentina · Atlantic service
- Product
- €72,000
- Transport
- €20,000
- Insurance
- €4,000
- Entry and checks
- €14,000
- Delivery and handling
- €8,000
€118,000 and arrival in week five. There are three separate reasons: arrival beyond the useful window, exceeding the new purchase limit and exclusion on integrity grounds concerning this fictional counterparty.
A workable route is not enough if the goods cannot enter on time. Applicable EU measures depend on origin and lot: duty, origin documents and the phytosanitary certificate must be checked before confirming Egypt. This is where analysis of public decisions meets an operational check: if the first lot is held at entry, week-three orders are at risk again.
Documents, data and constraints shape the decision.
Certificates and lot traceability
Quality checks the issuer, validity, production site and scope of claimed certifications; a company certificate does not automatically certify the lot. Origin, the phytosanitary certificate, relevant residue tests and supermarket specifications must reconcile with quantities, packaging and shipment documents. Voluntary or customer-required certifications remain distinct from mandatory entry requirements.
Unidentifiable lot or inconsistent documents: suspend release and revise the bridge plan.
Commercial data and supplier access
The supplier receives quantities, destination and instructions needed for the service, not the full customer portfolio or access to corporate systems. Booking portals, telemetry, recipients, subcontractors, retention and incidents are examined. For any personal data transferred outside the European Economic Area, the privacy adviser checks the processing basis, roles and applicable transfer mechanism. Trade secrets also require specific contractual and technical protection.
Restricted access, confidentiality agreements and defined responsibilities before information is shared.
Golden power and access to strategic assets
Legal counsel examines parties, sector, assets and the substance of the transaction under the rules applicable at its date. The baseline assumes no equity investment, plant transfer or grant of control over strategic infrastructure or data: a garlic supply alone does not establish a notification obligation. A subsequent equity stake, infrastructure arrangement or agreement affecting relevant assets requires a fresh scope assessment.
Record the basis of the scope assessment; if the relationship changes, assess procedures, conditions and timing before proceeding.
Contract, payment and responsibility
Purchasing and legal counsel define the delivery term and named place, who bears each expense and where risk transfers. They confirm insurance limits and exclusions, handling of rejected goods and delays, currency exposure and the payment beneficiary. An advance is tied to verifiable evidence and guarantees; acceptance requires evidence of lot identity and quality, not just a seller’s document.
Staged payments, acceptance conditions and remedies aligned with the order deadline.
Outcome
Management prepares a 40-tonne bridge purchase from Egypt in two lots, but authorises it only after checking the counterparty, vessel, trans-shipments, product availability, EU entry conditions and the cash schedule’s affordability. Thirty tonnes cover orders until the Asian cargo arrives; ten remain in reserve. The existing order serves the following period. If the alternative service crosses the exposed corridor or its first lot cannot arrive in time, the decision is reopened.
The first 20-tonne lot is scheduled for 29 January, the second for 12 February. At week six, 10 tonnes remain in reserve. The Egyptian order requires €102,000 of expenditure at assumed prices.
New purchase limit: €110,000; headroom within the limit, not free cash: €8,000; maximum price for 40 tonnes: €2.75/kg.
Before ordering, Purchasing obtains the carrier itinerary, any trans-shipments and dates for both lots: Egyptian origin alone does not prove that the shipment avoids the Red Sea. Quality checks the product and phytosanitary documents; the customs adviser verifies applicable EU measures. Management updates stock, orders and carrier advisories each week. A further diversion or an entry hold reopens the decision before more volume is committed.
Conditions for authorising the bridge.
Functions proposed in the case, to be confirmed in an actual mandate. Qualification, price and booking are resolved before ordering or advancing payment; entry and quality before release; demand and dates are updated throughout the bridge.
Counterparty · Purchasing and legal
Resolve ownership, signing authority, beneficiary and integrity concerns. Keep the Argentine counterparty excluded; make further Chinese orders conditional on managing institutional dependency.
Before ordering or advancing payment.
Lot and transport · Quality and logistics
Confirm both lots, documents, carrier capacity and the Mediterranean itinerary. The 29 January and 12 February dates must include entry clearance and warehouse delivery.
Booking before ordering; entry and quality before release.
Cash · Finance
Compare advances, balance, import VAT and recovery timing with the cash schedule. The remaining €8,000 are model headroom, not confirmed free cash.
Before commitment and whenever price or payment terms change.
Data and scope · IT, privacy and legal
Limit information sharing and record the applicable checks. New system access, an equity stake or a change of control reopens the dossier before the relationship is expanded.
Before sharing data, granting access or expanding the relationship.
What management receives
The deliverable comprises a report with evidence, assumptions and a reasoned recommendation; a presentation of alternatives, thresholds and actions; counterparty profiles and an open-check register. The stock timetable and sensitivities accompany the cost comparison. Each action has an owner and a deadline relevant to the decision.
Noble may provide the restricted consultation workspace, as agreed in the engagement. This case illustrates the deliverable structure; it does not assert checks on real counterparties or service access already activated.
How the bridge changes when assumptions change
Baseline
10 t/week, 6 weeks; bridge: 40 t; expenditure: €102,000; headroom within limit: €8,000.
One-week delay
10 t/week, 7 weeks; bridge: 50 t; expenditure: €127,500; exceeds limit by: €17,500.
Demand 20% higher
12 t/week, 6 weeks; bridge: 54 t; expenditure: €137,700; exceeds limit by: €27,700.
Delay and higher demand
12 t/week, 7 weeks; bridge: 66 t; expenditure: €168,300; exceeds limit by: €58,300.
Price held at €2.55/kg, with a reserve equal to one week of demand in each scenario. No assigned probabilities. The additional 10, 14 and 26 tonnes are not confirmed lots: achievable capacity and a new timetable are needed, checking stock before arrivals as well.
The Asian arrival slips further
With arrival after seven weeks, Purchasing must verify additional lots and achievable dates. Management reviews the purchase limit and Finance updates the cash schedule before proceeding.
A new attack changes the service
If the carrier changes the Egyptian lot’s itinerary, port or trans-shipment, Purchasing checks the new arrival before confirming the order. The bridge is not considered independent merely because it starts in another country.
The lot does not clear entry on time
Quality and the customs adviser resolve the hold; management updates available stock and informs those managing supermarket orders in time.
Demand exceeds the plan
At 12 tonnes of weekly orders, the baseline bridge is no longer enough. Purchasing updates quantities and timing against actual demand; management approves further commitments only after checking cost and cover.
Price or payments exceed the limit
Above €2.75/kg for the baseline 40 tonnes, the new purchase exceeds €110,000. Purchasing renegotiates the complete offer; Finance checks advances, VAT and other commitments. Meeting the limit alone does not establish cash availability.
Control, documents or the beneficiary change
A new beneficial owner, payment to another party, an unverifiable certificate or unexpected data access suspends expansion of the relationship. Purchasing, Quality and legal counsel update the dossier; management recalculates cover and cost before authorising further volumes.
The case shows why price cannot settle the decision alone. Supplier control and integrity, the actual route, lot certificates, shared data, reconciled costs and cash resilience all matter. The decision specifies missing evidence, who must obtain it and which changes require review. The same analytical approach applies when components, raw materials or contracts depend on route security and public decisions.
Public sources
- Maersk, advisories of 31 December 2023 and 5 January 2024; incident of 30 December
- UN Security Council, resolution 2722 (10 January 2024)
- UK government, response to Red Sea attacks (12 January 2024)
- European Commission, TARIC and import measures
- European Commission, plant health rules
- EU, Egypt trade agreement and garlic (Decision 2010/240)
- EU, garlic import quotas (Regulation 2020/761)
- EU, phytosanitary certificate for garlic (Regulation 2023/2059)
- Italian Senate, special powers and identification of strategic assets
- EU, data protection and international transfers (GDPR, Chapter V)
- European Commission, traceability and general food-law requirements