Industry News

RED SEA PASSAGE DEEMED UNSAFE BY CARRIERS - DIVERSIONS INCREASE TRANSIT TIMES

Major ocean carriers, including the world's largest container line MSC, have decided to avoid transiting the Suez Canal due to recent attacks in the region.

Other shipping companies, such as Maersk, Hapag-Lloyd, CMA CGM, ZIM, Evergreen, Yang Ming and Wan Hai are opting to bypass the Suez Canal due to security apprehensions. Additionally, COSCO-owned container line OOCL has halted cargo acceptance to and from Israel due to operational issues until further notice.

This decision is expected to impact sailing schedules and may lead to disruptions in global logistics.

Vessels navigating between Europe and Asia, a common route for goods on route to Australia, will now be rerouted southward through South Africa's Cape of Good Hope, lengthening transit times by approximately 10 days. Despite Europe roughly contributing only 16% to Australia's container imports, disruptions are poised to instigate price hikes for specific imports, with shipping lines contemplating increased fuel surcharges and war-related surcharge costs, consequently impacting end consumers.

The existing strikes at DP World have already led to delays in container deliveries to Australian ports so this latest news will only exacerbate the situation.

Houthi militants, involved in the Yemeni civil war since 2014, have targeted commercial vessels since the beginning of the Israel-Hamas conflict in October.

Below are some recent news articles with further information.

https://www.reuters.com/world/middle-east/shipping-firms-avoid-red-sea-houthi-attacks-increase-2023-12-18/

https://asia.nikkei.com/Business/Transportation/Japan-container-shipper-ONE-halts-Red-Sea-route-amid-Houthi-attacks

https://www.seatrade-maritime.com/containers/hmm-latest-container-line-reroute-red-sea

We will continue to monitor the situation and provide further details as it comes to hand.