Moving goods by sea can be a cost-effective and efficient mode of transport when the right plans are in place. But when a natural disaster occurs or there are political tensions what does that mean for your goods that are moving across water?
Keeping global freight moving requires complex solutions
Shipping freight around the world will always be a complex process where every decision needs to be weighed against multiple competing factors and nothing is ever simple.
As shipping accounts for 90% of the world’s trade it is critical to the world economy that there are alternatives to the usual routes in case there are major events which cause delays.
Everyone wants the most efficient routes for their goods to save time, distance and cost but it also needs to be reliable. The shorter, faster route may not be optimum if major events keep causing delays and contingency plans need to be in place to ensure that consignments keep moving despite disruption.
Red Sea attacks affect shipping routes
Recent attacks on shipping vessels in the Red Sea has resulted in all traffic being diverted around the Cape of Good Hope in South Africa rather than passing through the Suez Canal. This is to safeguard the crews, their vessels and customers’ cargo.
In December at least 6 container ships were targeted with rocket and drone attacks and there have been attempts to board the Houthi insurgents in Yemen which were intercepted by the US Navy.
Major global container shipping lines such as Maersk, Hapag-Lloyd and MSC have announced that they have suspended any attempts to pass through the Red Sea until further notice.
The net result is an increase in sea freight lead times and prices with vessels now taking two weeks longer than usual as they have to go around the continent of Africa.
These issues will get worse soon as demand for shipping is set to ramp up with Chinese New Year starting on 10th February 2024.
Major disruption is not an isolated incident
This is yet another incident in recent times which has caused a significant level of disruption to worldwide freight movements.
Some are the result of conflict such as in the Red Sea, but others are because of accidents, weather and climate change.
Grounding in the Suez
The Suez Canal was blocked recently when the container ship, “Ever Given”, ran aground in March 2021 which stopped container traffic for 6 days. It was estimated that this held up £7 billion worth of trade a day.
Drought in the Panama Canal
Freight traffic through the Panama Canal is still being restricted due to an ongoing drought which has been attributed to the El Nino climate pattern.
The dropping water levels is causing a backlog in cargo ships as waiting times have risen from between 5 to 7 days in October 2023 to around 20 days. This is causing some vessels to reroute through the Cape of Good Hope.
Usually over 40 million tonnes of goods is meant to pass through the canal a month which represents around 5% of global maritime trade. Canal authorities had to reduce their reserved booking slots down to 18 a day as of the 1st February 2024 from the usual 36 slots.
The Russia - Ukraine conflict
The recent ongoing conflict between Russia and Ukraine has led to several port shutdowns and re-routing which creates bottlenecks and congestion elsewhere.
There has also been a movement from rail transport which would have normally transited Russia to sea freight which has exacerbated the current issues in the Panama and Suez Canals.
Communication is key
One of the first steps when dealing with major delays and incidents is communication. There will often not be much information, but it is important that customers are made aware of issues, any short- and long-term plans for a work-around, and how much it may affect lead times and costs.
Consistent updates will allow customers to manage expectations with their own clients or adjust their plans to accommodate delayed delivery.
Sadly, working around a conflict is not new to us and the safety of the staff of the businesses that we work with will always be our highest priority.
We will use our experience and knowledge of worldwide freight to offer alternative, safer solutions for our customers. With our teams of specialists for every mode of transport, we can create bespoke solutions to make sure that your goods keep moving.
