Red Sea and Suez Canal Update
More than 100 container ships have now been rerouted around southern Africa to avoid the Suez Canal in response to the ongoing attacks caused by Houthi rebels attacking vessels on the Western coast of Yemen.
The diversion adds about 6,000 nautical miles to a typical journey from Europe to Asia alone and will likely add several weeks to container deliveries through to Australia. The Houthi rebels, who are aligned with Iran, have said they attacked ships in response to Israel’s bombardment of Gaza. Israel is retaliating against an attack by Hamas, which controls Gaza.
The US said on Tuesday it would try to lead a naval coalition to protect shipping in the Suez Canal but it is still uncertain when shipping lines will make the decision to return to the Red Sea.
Carrier responses so far:
- HAPAG-LLOYD announced on Friday, December 15th, that it suspended all sailings through the Red Sea until further notice.
- Maersk announced on Friday, December 15th, that it would reroute some of its vessels scheduled to transit the Suez Canal to now go via the Cape of Good Hope in South Africa, adding several days to the transit time.
- CMA CGM announced on Sunday, December 17th, that it would reroute some of its vessels scheduled to transit the Suez Canal to now go via the Cape of Good Hope in South Africa, adding several days to the transit time.
- MSC announced on Sunday, December 17th, that it would reroute some of its vessels scheduled to transit the Suez Canal to now go via the Cape of Good Hope in South Africa, adding several days to the transit time.
- Other Carriers have made similar statements about bypassing or avoiding the Red Sea and Suez Canal, for example: ONE, ZIM, Yang Ming, and HMM.
- Evergreen, COSCO, and OOCL have stopped accepting cargo to Israel with immediate effect and until further notice; however, there are no statements yet from COSCO and OOCL on suspending service through the Red Sea.
As expected, a number of carriers today have instated a non-negotiable ‘Red Sea Contingency Charge’ on all services to and from North Europe and Mediterranean with immediate effect, varying from USD 500.00 per TEU up to USD 1550.00 per container to deal with the additional running costs and flow-on effects of the ensuing delays.
The conflict is expected to have big implications on Global Trade for several weeks and potentially months to come as the delays and increased costs not only become a factor, but also the reduction of space and availability of returned empty containers with vessels being on the water for an additional 3-4 weeks per return voyage.
Our team is committed to reducing the impacts on each consignment and monitoring the situation closely. For further details, please contact your Key Account Manager to discuss.