Update: Red Sea

Published 2023-12-21

In the beginning of this week, we sent our first C Land News regarding the situation in the Red Sea concerning missile attacks against container ships in the area. We are following the developments daily and today we want to send another update in this rapidly changing situation.

As a precautionary measure, most of the shipping companies have confirmed that they are redirecting their vessels to and from Asia until the passage through the Red Sea is safe again. This means that they will sail around the Cape of Good Hope, resulting in an extended transit time of approximately 10–12 days to and from Asia.

Based on these actions, we anticipate the following scenarios: longer lead times, recurring deviations, rapidly escalating freight costs, and challenging times ahead.

The shipping companies’ vessels are going in “loops”, which means that they have calculated that it will take a certain number of days from Asia to Europe and then back to Asia, where the vessel, after loading, turns towards Europe again.

With the extended lead time of approximately 20–24 days (for one loop) we anticipate disruptions in the current schedules and a decrease in capacity across all lines. Consequently, this might lead to port congestion, overloaded terminals, and potentially a shortage of empty containers— which reminds us of what we witnessed during the pandemic.

Since the beginning of December, we’ve also observed increased activity and volumes, possibly due to the approaching Chinese New Year.

In response to the situation, we’re already witnessing the implementation of PSS (Peak Season Surcharge) starting from January 1, rapidly rising freight rates, and vessels that already is being fully booked for departures in January.

The indications that we have received suggest we might be heading toward a similar situation that we experienced during the pandemic.

So, we wanted to bring this to your attention and, as always, we recommend good planning when booking your transports.

If you have any further questions, please feel free to contact us!


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