31 Mar Middle East Volatility Impacts Global Shipping
The current conflict in the Middle East has disrupted logistics services throughout the region, with flow on effects reverberating across the globe.
During the first week of the conflict more than 700 vessels (approximately 10% of the world’s container fleet) were affected by disruptions along the Strait of Hormuz. Further ramifications have included the elimination of any Red Sea services restarting in earnest, the introduction of surcharges and stalled contract negotiations.
It is estimated that approximately 2 million 20FT equivalent units will be impacted as a result of the conflict based on cargo aboard vessels from ports in the gulf or booked within the next 90 days.
It is also speculated that if this conflict lasts over a year, shipping organisations will adjust as they did in response to the Red Sea disruptions: with amended schedules and alternative routes.
At the moment it not expected that this conflict will have extensive impact on containerised traffic, however increasing oil and gasoline prices will drive structural inflation, with subsequent pressure on consumer discretionary spending. In the interim, businesses should be prepared for longer lead times, tight capacity, elevated rates, and continued volatility across both ocean and air freight.
FOLLOW US FOR THE LATEST NEWS!
Simply click here to follow our LinkedIn Company Page to stay up-to-date with the latest industry news that may impact your business.
Sorry, the comment form is closed at this time.