Risks in the Red Sea
Geopolitical tensions and attacks in the Red Sea have increased since the start of the Israel-Hamas conflict. In the wake of this conflict, Iranian-backed Houthi rebels have focused their attacks in the Red Sea and Gulf of Aden on any merchant shipping that they believe is affiliated with Israel. After a series of recent attacks on civilian ships near Yemen, major shipping lines halted their sailings through the Red Sea.
The Red Sea is the super-highway to the Suez Canal, as 50-60 ships pass through the canal every day (that’s 19,000 ships a year), including about 30% of the world’s container traffic.
These attacks pose a direct threat to international commerce and maritime security and have jeopardized the lives of international crews from multiple countries around the world. The US Central Command believes that these attacks, while launched by the Houthis in Yemen, are fully orchestrated by Iran. The USA is already working together with other countries on "Operation Prosperity Guardian" to secure the shipping lanes in the region.
Additional costs on the horizon?
We are now seeing that major shipping lines have officially announced "Force Majeure", halted their sailings through the Bab el Mandeb-Strait and diverted vessels from the Suez Canal to around the Cape of Good Hope. This decision may cause an increase of minimum 10 days of transit time from Asia to Europe and approximately 15-20 days from Europe to Asia.
Currently around 80% of vessels are being rerouted.
Please be aware, that these disruptions will increase operating costs, which will translate into higher rates and additional surcharges. This development comes at an inopportune time, as extended transit times to Asia can lead to massive capacity and equipment bottlenecks in the high-volume period before Chinese New Year. This has the potential to add significant pressure to the container market and aggravate an already tense space situation in January, thus leading to high freight rates and delays in supply chains.
We will be monitoring this development closely.
FIND OUT MORE ABOUT OUR RAIL TRANSPORT SOLUTIONS BETWEEN CHINA AND EUROPE
Feel free to contact your local cargo-partner team if you have any further questions or if you are interested in the tailor-made solutions offered by cargo-partner to deal with the current challenges.
Cargo insurance can help in case of accident
Insure yourself against risks related to transporting cargo and protect your goods with cargo insurance. This covers not only damage/loss with respect to goods (as in accordance with terms of the policy), but is also applicable in cases of “Havarie Grosse”.*
cargo-partner’s freight insurance policies can insure your merchandise for up to 130% of its value and cover additional costs (e.g. carrying costs). Our Sea Cargo team would be happy to provide you with more detailed information.
* If a ship, with its cargo, is in distress at sea or endangered by fire or a lightning strike and is rescued alongside its cargo, then the cost of said rescue of ship and cargo is split proportionally amongst the goods’ owners and the ship’s owner according to the cost of the goods being transported. Even if the goods arrive undamaged.
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