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Red Sea Disruption

Stay updated with the latest developments in the realm of international shipping, amidst the Houthi Attacks and the Red Sea disruption

Last Updated: 11 July 2024 at 05:00am UTC

Latest News around Red Sea

Find timely updates around the ongoing Red Sea disruptions.

Red Sea rerouting causing Asian port congestion

Fluctuating service configurations and increased volumes are causing congestion at ports. Red Sea diversions contribute, with longer ship dwell times observed, such as Jebel Ali's increase from 1.5 to 2.5 days. Southeast Asian ports also face challenges, with Singapore and Port Klang reporting increased waiting times. Cargo capacity from Asia to Europe rose, but fluctuated significantly, impacting port operations. Concerns exist that Asian congestion may spread to European ports due to vessel reconfigurations and logistical challenges.

Hapag-Lloyd CEO is Bullish on the Second Half of 2024

Despite a bearish outlook for 2024, Hapag-Lloyd CEO Rolf Habben Jansen is optimistic about demand in the latter half of the year due to depleted inventories and a positive post-Chinese New Year recovery. Hapag-Lloyd experienced a significant drop in net profit in 2023, with shipping rates at unsustainable levels and the Red Sea crisis exacerbating industry challenges. Carbon dioxide emissions have risen due to Red Sea diversions, conflicting with Hapag-Lloyd's aim for net-zero carbon by 2045. However, Jansen remains bullish, citing the new alliance with Maersk, called Gemini, which aims to achieve over 90% schedule reliability through a spoke and hub system, ultimately enhancing efficiency and container utilization.

DMW Introduces Hotlines for Seafarers in High-Risk Areas

The Department of Migrant Workers (DMW) has designated hotlines for Filipino seafarers at risk in war zones, such as the Red Sea and Gulf of Aden. Seafarers can report refusal to sail through email and are protected from discrimination by Department Order No. 01 series of 2024. The DMW aims to ensure seafarers' safety and facilitate repatriation if they refuse sailing in high-risk areas, responding to recent incidents like the missile attack on the MV True Confidence.

Panama Canal Authority Expands Daily Transit Capacity by Three Slots

The Panama Canal Authority has increased daily transits by adding three extra slots per day at its panamax locks due to solid amounts of rain, raising the total to 27. This is a positive shift from the record drought since June the previous year. Additionally, two more slots will be auctioned for transit dates starting March 18, and one more slot will be available for transit dates beginning March 25. Despite this improvement, the canal is still far from its normal maximum of 40 vessels per day, and the maximum draft at larger locks has been reduced by nearly 2 meters. Currently, there are 54 ships waiting to transit the canal, down from over 160 in August. Many ships have avoided the canal in recent months due to long queues and high toll fees.

SCA Chief: Red Sea Tensions Propel Ship Freight Costs from $750 to $6,800 per Container

The Suez Canal Authority (SCA) Chairman Osama Rabie discussed the "Green Canal 2030" strategy at the MARLOG 13 conference, emphasizing a 55 million ton reduction in carbon emissions and a 17 million ton decrease in fuel consumption in 2023. Initiatives include promoting clean energy and collaborating with Greek Antipollution for waste collection from passing ships. Development projects aim to enhance navigation safety, including a 28% improvement in the southern sector, and the construction of three marinas. Rabie addressed rising freight prices due to Red Sea tensions, reaching $6,800 per container, as compared to $750 before the crisis.

Red Sea Environmental Crisis Looms as Ship Sunk in Houthi Attack Poses Hazard

The sinking of the UK-owned cargo ship Rubymar by Houthi militants in the Red Sea, carrying hazardous fertilizer, posing risks to marine life and navigation. The US military previously said the attack had significantly damaged the bulk vessel and caused an 18-mile (29-km) oil slick. The ship was carrying about 21,000 metric tons of fertiliser, CENTCOM said on Saturday. The release of fertilizer threatens the Red Sea's ecosystem, with concerns raised by experts about eutrophication and potential environmental damage. Additionally, incidents such as attacks on ships and disruption of communication cables further escalate tensions in the region.

Geopolitical Tensions and Inflation Contribute to Decline in Rotterdam Volumes

The Port of Rotterdam reported a throughput of 438.8 million tonnes, a decrease from 467.4 million tonnes in 2022, with coal, dry bulk, and containers experiencing the most significant volume losses. Dry bulk, led by a 20.3% decrease in coal, saw an 11.8% overall drop. However, agribulk increased by 3.0%, and crude oil throughput rose by 9.9%. Liquid bulk saw a 3.4% decrease, primarily due to a 6.5% decline in mineral oil products. Despite a 6.8% decrease in container throughput to 130.1 million tonnes, port revenues increased by 1.9% to €841.5 million. The port emphasized investment in projects like the CO2 transport and storage project, Porthos, and the national hydrogen network.

Red Sea Crisis Threatens to Quadruple Ship CO₂ Emissions

Due to attacks by Iranian-backed Houthi rebels in the Red Sea, over 100 container ships have been rerouted around Africa instead of using the Suez Canal, resulting in a significant increase in CO₂ emissions. Analysis shows emissions rising by 31% to 66% for journeys from Asia to Europe, with an estimated 260% to 354% increase in emissions overall. This spike jeopardizes global efforts to reduce shipping emissions by at least 20% by 2030. Additionally, the EU's Emissions Trading System will further increase costs for shipping companies, exacerbating the situation.

GoComet CEO Unveils Strategic Supply Chain Insights Amid Red Sea Disruptions

GoComet CEO Gautam Prem Jain discussed critical supply chain indicators like port throughputs and carrier performance in a CNBC interview, highlighting the ongoing disruptions from the Red Sea crisis. Challenges persist in meeting customer timelines, emphasizing the need for innovative solutions. He stressed on the importance of businesses staying informed about on-ground situations and leveraging data-led insights for resilient decision-making. Insights from Gautam suggest strategic pivots in supply chain routes and consideration of diverse coastal options, with Long Beach emerging as a dependable port amid disruptions.

Audi India Faces Automotive Supply Chain Disruptions Due to Red Sea Crisis

The ongoing Red Sea crisis is impacting Audi India's automotive supply chain, leading to delays in deliveries to Indian customers. Balbir Singh Dhillon, Audi India's head, expressed optimism that the situation would improve in the coming months, although challenges may persist through the current quarter ending March 2024. Dhillon highlighted Audi's focus on electrifying its vehicles, considering the possibility of assembling EVs in India to offer more affordable options, as EVs currently constitute about 7% of India's luxury car market.

Iran-Backed Houthis Strike Greek and British Cargo Ships in Red Sea

Iran-backed Houthis in Yemen launched six ballistic missiles at ships in the Red Sea and Gulf of Aden, damaging a Greek-owned bulk carrier with three projectiles. Another British-owned cargo ship was targeted earlier. The USS Laboon intercepted and destroyed a third missile. The US and UK had recently conducted joint airstrikes on Houthi bases in Yemen. The US, after mistakenly claiming to have notified Iraq of airstrikes, struck over 85 targets in Iraq and Syria, with 39 casualties. National Security Adviser Jake Sullivan indicated that more action was likely, emphasizing that the recent airstrikes were just the beginning of the US response.

Djibouti Intensifies Coast Guard Patrols Amid Red Sea Crisis

As tensions escalate in the Red Sea, Djibouti has heightened coast guard patrols along its strategic waterways, particularly the Bab al-Mandab strait, due to Houthi attacks on Israeli-linked ships from Yemen since November. Colonel Wais Omar Bogoreh, Djibouti Coast Guard Commander, emphasizes the need to bolster security amidst the crisis, aiming to mitigate potential threats in the Red Sea, Gulf of Aden, and Bab al-Mandab. Djibouti's economic growth over the past decade could be at risk due to the ongoing crisis, although the country hosts foreign military bases and collaborates with international partners for maritime security.

Israel Creates Trade Route through Arab States, Bypassing Houthi Red Sea Blockade

Israel has initiated a pilot test, led by Israel's Minister of Transportation Miri Regev, for a land trade route through Arab states, collaborating with UAE-based Puretrans FZCO and Israel-based Trucknet. The operations involve transporting various goods, including food, plastics, chemicals, and electronic devices. Despite ongoing conflicts, the move is seen as cooperation with Arab states, aiming to shorten transportation time by 12 days and reduce delays caused by existing issues. 

Israel Strikes Over 50 Hezbollah Targets in Syria Since October 7

Israel has reported striking over 50 targets associated with the Iranian-backed Hezbollah in Lebanon since the Gaza war began on October 7, 2023. Rear Admiral Daniel Hagari stated that Israeli forces targeted 34,000 Hezbollah sites, including border surveillance outposts, missile caches, and command centers, resulting in over 200 enemy casualties. Meanwhile, a Hamas official mentioned that a final agreement for a Gaza truce had not yet been reached.

EU Plans Red Sea Naval Mission in Three Weeks to Safeguard Ships from Rebel Attacks

The European Union is set to launch a naval mission in the Red Sea within three weeks to protect cargo ships from Houthi rebel attacks in Yemen. EU foreign policy chief Josep Borrell aims to have the mission running by February 17, with seven member countries contributing ships or planes. The mission's focus is solely on protecting and intercepting attacks, avoiding direct military engagement. EU defense ministers are expected to decide on the leading country and mission headquarters.

U.S. Navy Takes Lead in Combatting Houthi Rebels in Red Sea; Navy League Chairman Expresses Pride

Yemen's Houthi rebels launched an anti-ship ballistic missile at the U.S. Navy guided-missile destroyer USS Carney in the Gulf of Aden, leading to the Carney shooting down the projectile. Navy League Chairman Lou Schager praised the professionalism of the Navy personnel, emphasizing the importance of their training in responding to evolving challenges in the region as part of Operation Prosperity Guardian. 

Barcelona Port Faces 10-15 Day Delays Amid Red Sea Crisis

Ships arriving at Barcelona's port are experiencing delays of 10 to 15 days, navigating around Africa to avoid potential attacks in the Red Sea. Port chief Lluis Salvado stated that the delays impact various product shipments, including liquefied natural gas, with Barcelona being a major LNG terminal in Spain. The situation significantly affects ports in the Eastern Mediterranean, while those in the western part experience shorter delays due to proximity on the detour route around Africa. 

Red Sea Crisis Causes Over 200,000 Containers to Face Delays en Route to Piraeus Port

The president of the Athens Chamber of Tradesmen, Yannis Chatzitheodosiou, has reported, Piraeus port is facing up to 20 days of delays for goods, with over 200,000 containers yet to reach the port due to the Red Sea crisis. The cost of transporting each container has risen from EUR1,800 to EUR6,500 due to longer alternative routes. The Athens Chamber of Tradesmen warns of potential shortages and increased prices for electrical goods, mobile phones, and clothes if the crisis persists.

CO2 Emissions Surge as Cargo Patterns Shift Amid Red Sea Crisis

Emissions from vessels traveling around the Cape of Good Hope could be 27% higher per TEU than the Suez Canal route. Sea Intelligence warns of a worst-case scenario where supply-chain chaos leads to cargo being shifted onto smaller, faster ships, potentially increasing CO2 per TEU by up to 435%. Moving cargo from sea to aircraft, as per the International Civil Aviation Organization's calculations, results in a 4,872.6% increase in CO2 emissions compared to a conventional Suez Canal sea transit. Air cargo demand has surged, with volumes from Vietnam to Europe increasing by 16% YoY.

Red Sea rerouting causing Asian port congestion

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Past Updates

Hapag-Lloyd Plans Overland Transit via Saudi Arabia Amid Red Sea Disruptions

German shipping group Hapag-Lloyd will reroute its vessels around the Cape of Good Hope due to Houthi attacks in the Red Sea. The company plans to offer land connections from Jebel Ali, Dammam, and Jubail to its ocean shuttle service out of Jeddah as a contingency solution until normal shipping through the Suez Canal can be restored. Hapag-Lloyd will continue monitoring the situation to ensure the safety of its vessels in the Red Sea.

Indian Exporters Grapple with Escalating Costs Amid Houthi Attacks in the Red Sea

Owing to Houthi militia attacks in the Red Sea, the cost of Indian exports has more than doubled, affecting around 80% of India’s $14 billion monthly goods trade with Europe. Rerouting around the Cape of Good Hope has added 4,000 to 6,000 nautical miles and 14-20 days to journeys. The cost of a 24-foot shipping container from India to Europe, the eastern coast of America, and the UK rose from $600 to $1,500. The disruption is expected to impact $10 billion worth of exports in the fiscal year ending March 2024.

Egypt's Credit Outlook Turns 'Negative' Amid Suez Canal Revenue Decline from Red Sea Attacks

Rating's agency Moody's has downgraded Egypt's credit outlook from "stable" to "negative," citing a worsening currency and debt crisis. The country's foreign currency reserves have been further strained by the Red Sea crisis, as attacks by Houthi rebels lead to a decline in traffic through the Suez Canal, a key revenue source for Egypt. Moody's notes ongoing talks with the IMF for increased financial support, but warns of a "high likelihood" of debt restructuring and the need for additional austerity measures.

Geopolitical Checkmate? The Houthis' Strategic Move in the Red Sea Standoff Challenges Biden Administration

Israel's ongoing assault on Gaza and the emerging role of the Houthi rebels in Yemen, who have disrupted global shipping to protest Israel's actions.  The U.S. responded with airstrikes, but the Houthis remain undeterred. The Biden administration designated the Houthis as a Specially Designated Global Terrorist (SDGT) group, leading to further tensions. The crisis in Gaza and U.S. support for Israel contribute to growing anti-American sentiment in the region, bolstering the Houthis' political standing. The situation raises concerns about escalating conflict and the potential geopolitical implications.

Houthis Assure Safe Passage for Russian and Chinese Vessels Amid Red Sea Tensions

A senior Houthi official, Mohammed al-Bukhaiti, pledges safe passage for Russian and Chinese vessels through the Red Sea amid attacks on commercial ships, as long as they are not linked to certain countries, particularly Israel. The Iran-backed militant group aims to raise economic costs for Israel in solidarity with Palestinians in Gaza, while attacks on vessels connected to Israel are expected to continue, according to the Houthi official, Mohammed al-Bukhaiti. The Houthis recently expanded their targeting to include US- and British-linked ships following airstrikes in Yemen by these countries.

Maersk and Hapag-Lloyd Forge Strategic Partnership - 'GEMINI COOPERATION' for Enhanced Global Shipping

Maersk and Hapag-Lloyd have announced a long-term operational collaboration, named Gemini Cooperation, starting in February 2025. With a fleet pool of around 290 vessels and a combined capacity of 3.4 million containers, the collaboration aims to provide improved schedule reliability of over 90%, reduced carbon footprint, and competitive transit times across seven major trade routes. The cooperation includes 26 mainline services and a global network of dedicated shuttles to enhance flexibility, reduce disruptions, and offer a robust and reliable supply chain for customers. 

Trans-Caspian Corridor Gains Significance Amid Red Sea Crisis

The head of the International Association of Carriers, Sherafettin Aras, highlights the increased importance of the Trans-Caspian transport corridor due to the crisis in the Red Sea. Aras emphasizes that Turkey, with its logistical and investment potential, can play a leading role in realizing the project, offering new opportunities for global trade, particularly between Europe and Asia. The Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, connects China to Europe through Central Asia, the Caspian Sea area, Azerbaijan, Georgia, and Turkey, and is gaining significance amid geopolitical tensions and sanctions.

Ocean Freight Rates Decline on Key China-U.S. Route Despite Red Sea Crisis

Ocean carriers are lowering freight rates from China to the U.S. West Coast, contrary to expected increases, due to weak demand for Chinese manufacturing caused by factors like Houthi attacks in the Red Sea. Logistics experts suggest China's economic conditions may have a greater impact on supply chain prices.

Hapag-Lloyd Implements $1,000 Increase on Cargo Rates from Indian Subcontinent and Middle East to North America

Hapag-Lloyd has announced a General Rate Increase (GRI) / General Rate Adjustment (GRA) of $1,000 per container for cargo shipped in various container types from the Indian Subcontinent and the Middle East to the United States East Coast, West Coast, Gulf Coast, and Canada. The adjustment, effective from February 10, 2024, is applicable to all full containers and will remain in effect until further notice.

Maersk Diverts Ships from Red Sea Indefinitely Due to Houthi Attacks

Danish shipping company Maersk is redirecting all container vessels from Red Sea routes around Africa's Cape of Good Hope indefinitely, warning of significant disruption. Ongoing attacks by Houthi rebels in the region have led to increased shipping costs and concerns about prolonged disruptions to global trade.

CMA CGM Raises Asia to Mediterranean Shipping Rates by Up to 100%

CMA CGM, the French shipping group, announces a significant increase in container shipping rates from Asia to the Mediterranean, with rates for a 40-foot container between Asia and the West Mediterranean rising to $6,000 from $3,000 as of January 15. The move follows recent Red Sea attacks and longer shipping routes, contributing to expectations of higher freight rates across the industry.

DHL Advises Inventory Adjustments Amid Red Sea Disruptions

As shipping companies, including Maersk and Hapag-Lloyd, reroute vessels away from the Red Sea due to security concerns, DHL Group advises its customers to carefully review and potentially adjust their inventory strategies. While DHL does not operate ships, it suggests considering alternative transportation methods such as air freight or rail, emphasizing the need for inventory management amid changing trade routes.

US and UK Consider Military Action Against Houthi Rebels Following Red Sea Attack

The US and UK contemplate military intervention against Yemen's Houthi rebels after successfully repelling the largest Houthi attack on Red Sea shipping. The UN Security Council passed a resolution demanding an immediate end to the attacks, prompting warnings of potential consequences for the Houthi actions.

Red Sea Disruptions Pose Potential Impact on US East Coast Ports

The National Retail Federation (NRF) and Hackett Associates report that disruptions caused by recent Red Sea attacks could primarily impact East Coast ports, potentially leading to longer transit times and increased costs. The NRF's Global Port Tracker forecasts a gradual slowdown in the volume of inbound cargo at major US ports in the first quarter of 2024, with potential challenges arising from supply chain disruptions related to the Red Sea situation.

Vessels Switching Off AIS Transponders in Red Sea to Evade Houthi Attacks

In response to the threat of Houthi attacks in the Red Sea, vessels are turning off their AIS transponders, raising concerns about collision-avoidance and container monitoring. While ships argue safety and security concerns for disabling AIS, industry associations caution that it only marginally increases difficulty in tracking and may hinder military support, emphasizing the need for other preventive measures. 

Exporters Turn to China-Europe Railway Express Amid Red Sea Shipping Crisis

Disruptions in the Red Sea due to Houthi rebel attacks are prompting exporters to shift to the China-Europe Railway Express, doubling inquiries since the attacks began. With major shipping lines avoiding the Suez Canal route, concerns arise over Lunar New Year delays, leading some Chinese exporters to explore the railway as a viable alternative despite potential cost increases and challenges, signaling a potential shift in transportation modes amid the ongoing shipping crisis.

Red Sea Attacks Trigger Over 50% Surge in Ocean Shipping Rates on Key Lanes

Ongoing attacks in the Red Sea prompt rerouting of vessels, causing a spike of over 50% in ocean shipping rates in key lanes, with rates from Asia to Northern Europe rising 151% to over $4,000 per FEU. Carriers announce surcharges, with operational costs escalating due to longer transit times and the need to reroute via alternative lanes, impacting trade and triggering concerns about the duration and management of the current shipping crisis.

Global Shipping Delays Threaten U.S. Supply Chain Momentum Despite Strong December Jobs Report

Despite a robust December jobs report, global shipping delays caused by ongoing attacks on cargo vessels in the Red Sea, leading Danish shipping company Maersk to divert its fleet indefinitely, pose a risk to the momentum of the U.S. supply chain. White House officials express sensitivity to potential impacts on the economy, particularly considering past disruptions during the pandemic, with concerns about potential fallout for global manufacturing and consumer goods if the Red Sea remains unsafe for major shipping lines.

Asia-US Container Spot Rates Surge Amid Red Sea Vessel Diversions

The diversion of container ships from the Suez Canal to the longer route around the Cape of Good Hope has led to a significant surge in spot rates for Asia-to-US ocean freight at the beginning of 2024. Shippers are experiencing higher costs as vessels reroute, and the potential relief hinges on the return of services to regular routes, including the Panama Canal.

Next Clothing Retailer Warns of Sales Growth Moderation Due to Suez Canal Disruptions

Next CEO Simon Wolfson anticipates potential delays and disruptions in stock arrival, causing a moderation in sales growth, if the Suez Canal disruptions by Houthi militants continue through 2024. The retailer may mitigate the impact through earlier ordering or air freight but acknowledges the potential for some best-selling items to run out, affecting consumer choices.

AD Ports to Invest $200 Million in State-of-the-Art Terminal at Egypt's Safaga Sea Port

AD Ports Group has secured a concession agreement with the Red Sea Ports Authority to invest $200 million in developing and operating a new multi-purpose terminal at Safaga Sea Port in Egypt. The project, expected to be operational by 2025, aims to enhance global supply chain efficiency, create faster trade routes, and provide diverse logistics solutions for strategic trading partners, contributing to Egypt's economic objectives.

Global Businesses Turn to Airfreight as Red Sea Shipping Crisis Causes Delays

With ongoing shipping disruptions in the Red Sea due to drone and missile attacks by Houthi rebels and drought-related limitations in the Panama Canal, global businesses are exploring airfreight alternatives. The shipping crisis is prompting a shift of ocean cargo to airlines, causing concerns about vessel shortages and impacting supply chains, leading to potential surges in airfreight demand and increased transportation costs.

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