wefreight logo
December 19, 2023

Advisory: Impact of Red Sea Attacks on Global Shipping

Advisory: Impact of Red Sea Attacks on Global Shipping

The recent turmoil in the Red Sea region has led to major shifts in international shipping strategies. A significant number of shipping lines have put a halt to their voyages through this critical maritime corridor due to the ongoing attacks. Here’s an overview of the latest developments and their anticipated effects on the global shipping industry:

Major Ocean Liners Rerouting

  • Companies including MSC, Maersk, and Hapag-Lloyd are avoiding the Red Sea route due to security concerns.
  • This affects a substantial portion of global container traffic.
  • Alternative routes, via the Cape of Good Hope, could prolong voyages by 2-3 weeks.

Suez Canal’s Continued Importance

  • Despite changes, it remains a key global passage.
  • Facilitates about 12% of global trade and 30% of container traffic.
  • Over USD 1 trillion in goods pass through annually.

Consumer and Economic Consequences

  • Possible increases in shipping prices and longer transit times.
  • Potential for global inflationary impacts.

Possible Impact on Ocean Freight

  • Situation remains very fluid and changeable.
  • Many shipping lines are adjusting strategies.
  • Uncertainty remains over equipment availability
  • Pricing already rising and space availability unknown.

Future Market Changes and Concerns

  • Anticipate significant shifts in freight market and pricing.
  • Longer, faster routes may lead to increased emissions.
  • Possibility of more reliance on air freight due to production challenges from extended transit times.

The changes in shipping routes and the associated delays are anticipated to have a ripple effect, not just on cargo via the Red Sea and Suez canal, but on a more global scale, potentially affecting consumer goods supply, especially with the upcoming Chinese New Year, and could drive up prices for consumers.  Analysts predict that this disruption could cause knock-on effects well into early 2024, affecting various sectors and potentially leading to an overall rise in freight rates.

For the latest information and specific guidance for your shipping, we recommend reaching out to your nearest WeFreight office. For further assistance, please contact us here.

Stay up to date about
the latest news and insights

Want all the latest WeFreight news and insights delivered
directly to your inbox? Subscribe to our newsletter and stay
updated on the latest developments.

Want all the latest WeFreight news and insights delivered directly to your inbox? Subscribe to our newsletter and stay updated on the latest developments.

Insight Form