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The Red Sea is now facing a surge in regional tensions leading to attached on commercial vessels. The strategic importance of the Red Sea is obvious, it is a pivotal route for container shipping and global commerce – connecting Indian Ocean with the Mediterranean Sea via the Suez Canal. Almost 15% of global shipping traffic use this strategic waterway, building it as the fastest route between Europe and Asia.
The recent events are part of the larger geopolitical conflicts influencing this important trade route. The attacks are focused near the Bab al-Mandab Strait, causing significant rerouting of maritime traffic.
The Red Sea crisis tremendously disrupted global shipping operations. Carriers like Maersk, COSCO and others have experienced threats to their vessels, leading to rerouting decisions and operational pauses.
According to analysts, the fleet capacity that moved through the Suez Canal fell more than 60% in the past few weeks period from 18-Dec to 07-Jan, compared to the corresponding period last year. Carriers now have no choice but to use another alternative route around the Cape of Good Hope, while safer, is longer and more costly, leading to increased fuel bills and higher insurance premiums.
According to Xeneta, ocean freight shipping rates between the Far East and North Europe have increased by 124% since the crisis escalated in mid-December 2023. Rates between the Far East and US East Coast have increased by 45% and rates into the Mediterranean have increased by 118%.
The Ripple effects of the Red Sea attacks are reaching consumer globally. The increased costs of shipping, driven by the need to reroute and the heightened insurance rates, are likely to translate into higher prices for various goods.
There is a good chance the containers will be delayed in delivering as the Red Sea crisis are forcing container ships to travel the longer Cape of Good Hope route, adding around extra more than 10 days and 3,500 nautical miles to their voyage times.
No doubt the Red Sea crisis will contribute the global sailing schedule disarray, best way to ensure the goods transported on time is to book the space with your logistics provider as early as you can. A good freight forwarder will definitely help you to secure the space and requisite equipment for your shipments.
