Red Sea Houthi Attacks Continue to Disrupt Global Shipping: Impact on Trade and Supply Chains, Factory Closures
The Houthi attacks on container ships in the Red Sea continue to severely affect the movement of ships in that area looking to enter the Suez Canal. Fighter planes from the US and the UK carried out air strikes on January 11th in Yemen, where Houthi militants have been launching attacks on commercial ships since December. This suggests that the conflict is worsening, and the shipping problems will likely last throughout 2024.
In the first week of January, the number of container ships going to or from the Suez Canal in the Red Sea was 90% lower than last year. A research firm called Linerlytica found that 354 ships have been redirected south of Africa around the Cape of Good Hope since December 15th, affecting 80% of all ships between the Atlantic, Mediterranean, and Indian Ocean. Only a few specific carriers are still using the Suez Canal.
Because of these disruptions, shipping companies are not offering long-term agreements for the Asia-Europe market right now. It is difficult to determine fixed contract levels due to the longer transit times and upcoming Lunar New Year holidays. Problems with space and equipment also continue to persist. Since January 1st, additional charges like GRIs, Space Guarantee premiums, and other fees related to the Red Sea situation have been imposed. Despite shippers being willing to pay these charges, there's no guarantee of service. The situation has additionally led to temporary closures of certain factories, including Tesla's plant in Germany and Volvo's factory in Belgium. The situation is being closely monitored by the Canaan Group as it evolves. See full article here.
Please contact Canaan Group sales for more information about your shipments.
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