Disclaimer | This article is copyrighted and may not be reproduced without permission As the main channel for maritime trade between Asia and Europe, the geographical location of the Suez Canal-Red Sea route is of great importance to traders. However, affected by the Israeli-Palestinian conflict, ships passing through this route have been frequently attacked, affecting many global shipping giants and severely impacting international trade. However, after the beginning of the year, the tense situation has not eased, but has shown signs of continued escalation. Just recently, the global shipping giant Maersk announced that all of its ships will no longer pass through the Red Sea. Based on reports from various parties, the latest news and impact analysis of Red Sea shipping are summarized. Since mid-to-late December 2023, many shipping giants around the world have announced the suspension of Red Sea route transportation and booking business. However, the impact of the Red Sea crisis is still fermenting: 1. Maersk announced that all ships will no longer pass through the Red Sea On the evening of January 5th local time, shipping giant Maersk announced that in the foreseeable future, all of the company's ships will no longer pass through the Red Sea. All Maersk ships transiting the Red Sea/Gulf of Aden will sail south around the Cape of Good Hope, and warned customers to prepare for serious supply disruptions. According to statistics, the total number of Maersk ships detoured this time will exceed 170. Before the full suspension of operations, Maersk confirmed on December 31, 2023 that its cargo ship was attacked while passing through the Bab el-Mandeb Strait from Singapore to the Port of Suez in Egypt, and suspended sailing through the area for 48 hours. 2. Many shipping companies are forced to increase the voyage distance by sailing around the Cape of Good Hope It is learned that due to the situation in the Red Sea, many merchant ships have recently encountered attacks by Houthi armed forces in the Red Sea. In order to avoid the attacks, shipping companies were forced to change their routes and choose to go around the Cape of Good Hope. Flexport data shows that as many as 85% of container ships that were originally scheduled to cross the Red Sea chose to go around the southern tip of Africa. Recently, German shipping company Hapag-Lloyd also said that it would continue to choose to go around the Cape of Good Hope for safety reasons. According to Vortexa, if merchant ships bypass the Cape of Good Hope in Africa, the sailing time on major routes from the Middle East to Europe and from India to Europe will increase by 58% to 129%. Among them, the largest increase in the time required for goods to reach their destination is the Middle East Gulf to Mediterranean route, which increased by 129%, from 17 days to 39 days. 3. Space is tight and some routes are already full According to China Business News, there were empty sailings on the Shenzhen Yantian Port's European route in January 2024 on January 8, January 15, January 17, January 18, January 22 and January 25. At the same time, due to the detours of a large number of ships, there will be a 2-3 week delay in delivery time, and the shipping capacity will continue to be in short supply in the coming weeks. A freight forwarder said that "the shipping space in early January is already full", and the shortage of containers is expected to be more serious in mid-to-late January. Affected by this, the shipping space of the China-Europe Express has also been fully booked in advance. Flexport said the crisis in the Red Sea is profoundly reshaping the global maritime logistics landscape. It is understood that in addition to the suspension of shipping lines and the imposition of surcharges, shipping costs on other trade routes have also increased significantly. As of January 5, data from the Shanghai Shipping Exchange showed that the SCFI for this period was 1896.65 points, a month-on-month increase of 7.8%. European routes: The tight capacity situation will continue in the short term, and the market freight rates will continue to rise in this period. - The freight rate from Far East to Europe is USD 2,871/TEU, up USD 177 or 6.57% from the previous period.
- The freight rate from the Far East to the Mediterranean is USD 3,620/TEU, up USD 129 or 3.7% from the previous period.
USA: Driven by the increase in freight rates on other routes, the spot market booking prices continued to rise this period. - The freight rate from Far East to West Coast of the United States is USD 2,775/FEU, up USD 222 from the previous period, an increase of 8.7%;
- The freight rate from the Far East to the East Coast of the United States is US$372/FEU, a sharp increase of US$577 from the previous period, an increase of 10.45%.
In addition, some international shipping companies announced that they would increase container freight rates from January 15, and some companies proposed to levy a transportation interruption surcharge. In short, ocean freight rates will continue to rise in the future, and some freight forwarders said that many shipowners' headquarters have a high desire to increase prices. In this tense situation, the impact of the Red Sea crisis on the trade shipping market goes far beyond rising freight rates. According to freight platform Xeneta, the cost of shipping a 40-foot container from the Far East to the Mediterranean rose to $2,320 from $1,865 at the beginning of December after the situation in the Red Sea escalated; the cost of shipping a 40-foot container from China to the UK rose to $2,320 from $1,425 at the beginning of December. According to analysis by professionals, under the Red Sea crisis, there are three main situations in the global freight market: the voyage and sailing time of some container ships will be extended again; the trend of shipping companies detouring around the Cape of Good Hope will continue; and risk spillover will lead to higher freight rates on other routes. Up to now, the impact of the situation in the Red Sea has lasted longer than the grounding of the Ever Given in 2021. Short-term problems such as freight rate increases, shipping delays, booking difficulties, and delivery delays have not been properly handled. Sellers are advised to make shipping plans in advance and continue to pay attention to international freight conditions and the situation in the Red Sea.
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