What shippers need to know about the 20% capacity cut on Asia-Europe routes due to Red Sea disruptions
𝗪𝗵𝗮𝘁’𝘀 𝗴𝗼𝗶𝗻𝗴 𝗼𝗻 𝗵𝗲𝗿𝗲?
Disruption to Red Sea container shipping is increasing, leading to longer voyages, higher fuel costs, and a 15-20% capacity reduction between Asia and Europe in the second quarter of 2023.
The attacks by Houthi militants in the Red Sea are prompting shipping companies like Maersk and Hapag-Lloyd AG to reroute vessels around Africa's Cape of Good Hope, causing ripple effects on other container freight routes.
To mitigate the impact of disruptions, Maersk is taking measures such as sailing faster, leasing more containers, and seeking alternative ports like Algeciras or Valencia in Spain.
📌 𝗝𝗕𝗙 𝗣𝗘𝗥𝗦𝗣𝗘𝗖𝗧𝗜𝗩𝗘 - 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗳𝗿𝗼𝗺 Adam Gray
𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝗛𝗼𝘂𝘁𝗵𝗶 𝗺𝗼𝘁𝗶𝘃𝗮𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝘁𝗵𝗶𝘀 𝗼𝗻𝗴𝗼𝗶𝗻𝗴 𝗳𝗼𝗿𝗺 𝗼𝗳 𝗺𝗼𝗱𝗲𝗿𝗻 𝗱𝗮𝘆 𝗽𝗶𝗿𝗮𝗰𝘆?
I had heard about these ongoing attacks, but didn’t know why they were happening until I read this article https://lnkd.in/eqgCPSgM and started digging.
The global impact in slowing the supply chain will be felt by everyone to at least some extent in terms of increased freight charges and delays as providers plan to avoid these shipping channels.
𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗛𝗼𝘂𝘁𝗵𝗶𝘀 𝗵𝗼𝗽𝗶𝗻𝗴 𝘁𝗼 𝗴𝗮𝗶𝗻 𝗯𝘆 𝗼𝗰𝗰𝘂𝗽𝘆𝗶𝗻𝗴 𝗮𝗻𝗱 𝗰𝗹𝗼𝘀𝗶𝗻𝗴 𝗼𝗳𝗳 𝘁𝗵𝗶𝘀 𝗿𝗲𝗴𝗶𝗼𝗻 𝗳𝗿𝗼𝗺 𝘁𝗿𝗮𝗱𝗲?
Apart from clamoring for shrinking supplies of oil and other commodities being shipped in the region, there is a belief this is primarily being done in protest of the Saudi supported, internationally recognized government of Yemen.
It’s presumed these efforts are to generate leverage in ongoing negotiations and peace talks.
While the global shipping providers claim to have mitigation plans to help alleviate congestion and costs by the end of 2024, the long term solutions to these type of problems, continues to be clouded with no noted timeline for resolution.
Follow 🔔 #jbfreporter for industry news updates
Image source: REUTERS
