If ongoing Industrial Action isn’t enough to disrupt international shipping to and from Australia, the security situation in the Red Sea can only make matters worse. The next 4-5 weeks and run-up to Chinese New Year (10th Feb 2024) will be a critical and challenging time for global shippers who once again find themselves contending with limited capacity, port congestion, displaced equipment and higher ocean freight costs.
The increasing attacks on merchant vessels travelling through the Red Sea and a resurgence of Somali pirates in international waters continues to shake the shipping industry. Since the first attack back in December, an increasing number of Carriers are adjusting their services to navigate through this tumultuous region.
The importance of the Suez Canal gained recent recognition when the Ever Given container ship caused a significant bottleneck just as a global pandemic unfolded. Acting as a crucial and efficient passage for merchant vessels journeying between Europe, the Middle East, and Asia/Oceania, the canal is an integral passage for worldwide trade.
Each Shipping Line is taking a different approach to the situation, navigating new routes and enduring rising costs, all in the best interest of their seafarers and of course, your cargo. It should come as no surprise, that with many Carriers now sending their ships down via the Cape of Good Hope, which adds approximately 8-10 day to the transit time, that they will recover the additional fuel usage through new operational surcharges.
At time of writing, these ‘cost recovery’ surcharges can range anywhere from USD 150 to USD 1,550 per container and depending on the shipping line, will be called something different. Ultimately, regardless of what it’s called, clients should come to expect a higher landed cost.
As well as increased costs, clients should naturally expect increased transit times, congestion at various ports and ongoing schedule disruption. We expect this to have wider implications on the global supply chain/all trade routes as Carriers shuffle ships and redistribute equipment globally.
For clients with cargo originating in Europe or transiting via Singapore, ongoing disruptions to Estimated Time of Arrivals (ETAs) are expected. We appreciate your understanding in the event that ETAs deviate from the original transport plan.
As the situation evolves, we will continue to update you. Should you require further details, please do not hesitate to contact our friendly team.