18 Mar Red Sea Disruptions Slated To Continue Indefinitely
As general cargo ship Rubymar officially became the Red Sea’s first vessel casualty and Houthi attacks continue, there appears to be no end in sight for the current Red Sea situation.
Drewry data shows that container ship transits across the Suez Canal were down 64% from 138 to 50, whilst conversely; transits around the Cape of Good Hope were up 168%, from 77 to 206, when compared to the same period last year.
With the duration of this disruption yet to be determined, it is speculated that the risk of attack will remain for months ahead. However, according to Drewry analysts, the anticipated effect on equipment shortages, port congestion and ship schedules will be far less than those experienced during the pandemic as the supply chain landscape pivots and recalibrates to the longer transit times involved in sailing around the southern tip of Africa.
Even though the industry appears to be adjusting to the new status quo of new trade routes, there are impacts reverberating across the global supply chain landscape.
There is speculation that the disruptions will eventually see ships clustering at ports upon arrival over time, resulting in port congestion, worsening equipment shortages and cancelled sailings.
At the moment, shipping organisations have leveraged otherwise idle vessels to help manage the disruptions caused by the Red Sea situation, but it remains to be seen how long this will circumvent any potential disruptions to the supply chain.
In addition, according to Sea-Intelligence Maritime Analysis, global ocean reliability fell to 51.6% in January, a major downgrade from historical comparisons of reliability in the 70% to 80% range, and whilst there are signs this may be improving, it is too soon to forecast a significant recovery with regards to reliability.
At a macro perspective of the industry, the Red Sea may actually provide shipping companies the time to better manage the deployment of new vessels while ramping up the rate of recycling the ageing global fleet, giving carriers more cushion to cascade the deployment of newer, larger vessels amid muted global demand.
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