The global maritime trade supply chain continues to face disruptions caused by the prolonged crisis along the world’s largest trade route through the Red Sea and Suez Canal. Over the last weeks, the Houthi insurgents attacked several container vessels within the Bab al-Mandeb Strait which is leading to suspension or reroute operations from almost all carriers. 262 container vessels in this area have been affected so far, which in turn reduced the Suez passage utilization by 61%.
As the crisis continues, we expect schedule integrity to degrade, impacting equipment availability which brings additional challenges to the overall booking and planning process. It is increasingly important to work to secure capacity earlier than normal, at least through the month of February. It is also important to note that this is not an “Asia origin centric” situation, these same conditions are becoming more prevalent in Europe impacting exports not only to Asia but also transatlantic and “north-south” flows.
Europe Westbound (US/MX/LATAM)
Europe Eastbound (mainly Asia, MEA/IPBC and OCE)
- 10 days longer transit time due to routing via Cape of Good Hope leading to 14 days longer transit because of change of operational berthing windows at the terminal.
Asia Westbound (Asia to Europe)
- 10-15 days longer transit. More blank sailing and port omissions are expected.
- Consequently, 35-40% less weekly capacity in the 2nd half of Jan and until Chinese New Year (CNY).
- Additional demurrage and detention might incur in January affecting cargo deliveries.
- Additionally, we expect the crisis to drive a higher peak prior to CNY.
- Large roll pools are being build up, to secure volume on the vessels during CNY.
- Equipment shortages are being experienced SHA, NGB and TAO and are expected to increase later this month.
- Short term rate levels have increased considerably, and PSS and emergency surcharges are being applied.
- US, British and French military vessels have been deployed to the Red Sea to safeguard commercial vessel convoys and are actively engaged in defending against Houthi attacks. These last days have seen US & British led attacks on Houthi positions in Yemen intended to diminish the ability of Houthi forces to continue to impact international trade.