Escalating conflict in the Red Sea region is disrupting international shipping routes, leading to significant increases in transit times for the container shipping industry, according to a new report published by supply chain visualisation platform Project44.
Since the Houthi attacks in Yemen in November, hundreds of vessels from all major shipping companies have changed routes to avoid the region.
The Suez Canal, one of the world's busiest sea routes, has seen an unprecedented drop in traffic as a result. An analysis of data from May 2024 found that shipping through the Suez Canal has fallen by an astonishing 80 per cent compared to May 2023. The report notes that this trend is unlikely to be reversed any time soon and that the upcoming peak shipping season is unlikely to prompt carriers to return to using the route.
As a result, carriers are using alternative routes around Africa or through the Panama Canal, which significantly increases transit times. Median container transhipment times on the China-to-Europe, Southeast Asia-to-Europe, and Southeast Asia-to-U.S. East Coast routes have lengthened by a median of 10-14 days.Project44 says these transhipment times represent the "new normal" as carriers continue to avoid the Red Sea.
The aftermath of the conflict rippled through the US and Europe, with overall shipping times increasing by almost two weeks. Although initial schedules will change after the attacks, carriers have now adapted to the new routes and delays have been reduced to 4-8 days from the initial highs.
Project44 advises shippers to plan with these extra shipping days in mind to ensure shipments arrive in time for the high demand retail season.
The recent escalation of conflict in the Red Sea region has had a significant impact on international shipping routes, resulting in a significant increase in transit times for the container shipping industry, according to an extensive report published by Project44, the leading authority on supply chain visualisation.
Since the Houthi attacks in Yemen in November, hundreds of vessels from all major shipping lines have been re-routed to avoid travelling through the region in order to avoid the risks. This change has had a dramatic impact on traffic through the Suez Canal, one of the world's busiest sea routes, which, after experiencing a significant decline, showed a whopping 80 per cent drop in May 2024 compared to the same period last year - an extremely alarming drop.
The report further notes that this trend is unlikely to be reversed in the short term, and that even the upcoming peak season will not encourage carriers to return to the route. As a result, carriers are opting for alternative routes around Africa or through the Panama Canal, which has inevitably led to a significant increase in transit times.
Specifically, average container transhipment times have increased by 10 to 14 days on routes from China to Europe, Southeast Asia to Europe, and Southeast Asia to the East Coast of the U.S. Project44 emphasises that these extended transhipment times are now the "new normal" as carriers continue to avoid the Red Sea region.
In addition, the fallout from the conflict has spread to the United States and Europe, resulting in an overall increase in shipping times of almost two weeks. Although there was a degree of schedule fluctuation in the early days following the attacks, carriers have now adapted to the new routing arrangements and delays have been reduced from their initial highs to between four and eight days.
To ensure that cargoes are delivered in a timely manner during the high demand retail season, Project44 advises shippers to take these additional shipping days fully into account when planning their shipments.
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