The recent attacks on several container vessels travelling through the Red Sea have resulted in a widespread shift in global shipping routes. Many prominent shipping lines, including Maersk, MSC, and Hapag-Lloyd have halted shipping operations through the Red Sea and the Suez Canal, and have opted for alternative routes. With the Suez Canal facilitating about 12% of global trade and 30% of shipping traffic, this shipping line disruption has had major effects on global shipping and is predicted to have further impacts on trade and the economy. These impacts are outlined below.
Shipping Rerouting
- Major shipping lines have rerouted their shipping in response to the ongoing security concerns around the Red Sea.
- Rather than travelling through the Red Sea and Suez Canal, shipping lines are travelling via the Cape of Good Hope in South Africa.
- This rerouting can draw out voyages by 2 to 3 weeks.
Impact on Sea Freight
- Many shipping lines are adjusting shipping strategies to avoid this region.
- Currently, there is uncertainty over equipment and space availability.
- Sea freight prices are beginning to rise.
- Transit times are increasing drastically.
Impact on the Economy
- Delay and disruption of global supply chains.
- Potential for global inflation to rise.
Market Predictions and Future Concerns
- Significant shifts in the freight market and pricing expected.
- Longer, slower routes will likely increase emissions.
- More reliance on air freight expected.
The impact of the Red Sea attacks are likely to have a ‘knock-on’ effect, impacting countless supply chains across the globe. ISS Shipping kindly asks for patience and understanding as we navigate these difficult and extreme circumstances. We understand that now is a very difficult time for shippers and business owners, and we will continue to go above and beyond to support our clients and partners through this crisis.
For any further questions or concerns, please do not hesitate to get in touch with the ISS Shipping team.
