Due to the ongoing crisis in the Red Sea the situation continues to impact global shipping lanes. Last week saw more attacks on vessels by missiles launched from Houthi-controlled areas of Yemen.
Despite allied nations air and missile strikes in retaliation, the attacks are still impacting shipping with the result being most liners avoiding the area to keep their vessels and crew safe.
In recent days, these Red Sea attacks continue to cause significant disruption to the global supply chain, with around a 68% decrease in vessels transiting through the Suez Canal and 264 vessels known to have rerouted in the majority around the Cape of Good Hope. This is causing severe delays on both east and westbound services, often adding around 12 to 15 days transit time. This trend is causing significant space issues and increases in freight rates throughout the shipping industry.
The issues in the Panama Canal are adding to global supply chain disruptions and it is expected that throughout Q1 and Q2 2024 the trends will persist. The upcoming Chinese New Year will as always create congestion in the market so forcing rates to remain higher than seen during 2023. These constraints on ocean trade are also impacting air and rail options as the industry looks for alternative methods to move cargo. We are seeing space and rate increases on many air trade lanes along with rail freight prices from Asia to EU being higher than seen in recent months. In addition to this war risk premiums on insurance are increasing as the market adjusts to this volatility.
The Federal Maritime Commission (FMC) has convened a public hearing on 7th February 2024 to investigate how the Red Sea crisis is impacting commercial shipping and the global supply chain, aiming to gather information on the effects of attacks and how the industry is responding to such incidents.
Atlas Logistics UK Ltd in conjunction with our partners are working to mitigate the impact as much as possible and the whole team is here to help however, we can. Please feel free to reach out to us if you have any concerns or wish to look at alternative methods of transport to sustain your business continuity.