We wish to provide you with an update concerning the significant rise in freight rates and transit times caused by the Red Sea tensions.

Red Sea Tensions 

What Has Happened  

As previously indicated in our February 27, 2024, update concerning vessel diversions prompted by security concerns in the Red Sea, carriers continue to circumvent Suez Canal transits due to ongoing paramilitary activities along the Yemeni coast. This week, Houthi rebels perpetrated multiple attacks on the Laax vessel, resulting in significant damage. Fortunately, the vessel managed to seek refuge in a safe harbor. 

What to Expect from Carriers 

Given the persistent crisis in the Red Sea region, carriers will continue their diversion strategies, opting for the Cape of Good Hope route to ensure safe passage to Europe and the Americas. 

The ongoing repercussions of the Red Sea reroutings have notably impacted transit time, congestion and escalating operating costs. Most carriers have been compelled to consolidate their services due to the strain of extended transit times, resulting in the absorption of unutilized vessel capacity.  

Consequently, some carriers have been compelled to discontinue certain ports of call, while others have adhered to scheduled port omissions. Several vessel operators have been confronted with managing both scenarios. Additionally, the charter vessel market has diminished, with carriers that acted swiftly essentially securing the bulk of available vessels for hire. As a result, there are fewer weekly services and extended transit times. 

This reshuffling of vessel schedules, coupled with increased days at sea and a shortage of empty containers, presents a significant short-term challenge in securing space. What initially seemed a manageable issue contingent on carrier selection has now escalated into a pervasive global concern. 

In response to these challenges, certain carriers have introduced "premium" ocean freight pricing options to address a growing demand from clients seeking more expedited booking acceptance, priority container and vessel capacity.  

What We Recommend 

Despite these market dynamics, Delmar is actively managing our global capacity with the proactive support of our carrier partners and remain committed to providing competitive pricing while securing necessary capacity across all trade lanes with the most efficient service options available.  

Contact us to learn how Delmar can help you with alternative carrier options and solutions for your cargo.

 

For additional information and assistance, please contact your local Delmar Representative.