Industry News

SUEZ CANAL & RED SEA PASSAGE UPDATE - 25TH JAN 2024

We wish to provide you with an update on the current status of the Red Sea and Suez Canal, building upon our previous communication dated 20th December.

The situation in the Red Sea remains dynamic, with vessel transit decisions resting on the discretion of individual vessels and their respective companies. Notably, major ocean carriers, including industry leaders such as Maersk, Hapag-Lloyd, CMA CGM, OOCL, and MSC, have opted to reroute their vessels via the Cape of Good Hope to mitigate the risks associated with continued security concerns in the region.

This strategic shift has necessitated adjustments to rotations and sailing schedules, resulting in extended and delayed transit times, as well as modifications to advertised delivery dates. The impact is further exacerbated by rising operating costs and increased insurance premiums for carriers. Since October 2023, freight pricing into and out of Europe, particularly in the Asia-Europe trade lanes, has witnessed a substantial surge, ranging between 200-300%.

European nations with prominent container port traffic, such as Spain, Netherlands, Germany, Belgium, Turkey, Italy, and the UK, are anticipated to bear the brunt of these changes. Considering that 80% of the world's goods move via ocean transport and 20% of that traffic typically traverses the Suez Canal, the implications are significant.

Compounding these challenges, disruptions in container movements are impacting equipment supply in certain locations and origins. Re-routing, cancellations, and prolonged transit times are contributing factors.

Over the past week, numerous clients have informed us of notices received from their Marine Insurance providers, indicating cancellations of coverage for loss caused by War or Strikes for cargo transiting through the Red Sea, as well as the coasts of Somalia and Yemen. In light of this development, TCF strongly recommends reaching out to your Insurance broker if you harbor concerns regarding freight moving through these waterways.

As we navigate these evolving circumstances, TCF is committed to keeping our clients informed. For further details on this matter, please do not hesitate to contact your local TCF representative.