Red Sea Service Disruptions
Further to our Blog Shipping Lines to Avoid the Suez Canal as Red Sea Attacks Continue please note the following updates.
As a result of recent attacks on commercial vessels, all major shipping lines are suspending and diverting trade from the Red Sea with immediate effect, with most rerouting their vessels via the Cape of Good Hope, which will impact transit times by an additional 10-20 days.
With over 30% of global containerized traffic moving through the Suez Canal, the unavoidable decision to reroute vessels away from it will have a profound impact on supply chains mainly to/from the Indian Sub-Continent and Asia, however it is expected to affect other trades as well.
Freight costs and insurance premiums are almost certain to rise, as shipping lines pass on the additional costs of the extended voyages.
New surcharges are already being applied by shipping lines to offset operational costs, with MSC, CMA CGM and Hapag-Lloyd being the first to announce that they will apply a carrier diversion related surcharge for all cargo loaded ex India, Pakistan, Sri Lanka, Bangladesh, Middle East to Canada & The USA East Coast. It is expected that other carriers will be announcing similar contingency related charges in the short term, for these and other trade lanes.
In addition to longer transit times and increased costs, the effects are expected to trickle down to equipment shortages (due to the longer transit times causing reduced levels of carrier equipment availability) and weeks where there are high levels of missing sailings.
Delmar remains available to provide essential assistance during this period of uncertainty to supply chains.
For additional information and assistance, please contact your local Delmar Representative.