Phillip Damas, Head of Supply Chain Advisors and CEO of Drewry Shipping Consultants, analyzing the Red Sea crisis, emphasizes that the rerouting lengthens delivery times by at least 10 to 14 days for destinations in Europe and that “despite the launch of Operation Prosperity Guardian, shipping companies continued to hijack most of their ships.”
Drewry estimates that around 822 vessels out of a total of 6,100 worldwide, and up to 10 million TEUs of capacity out of a total of 28 million TEUs (around 30% of global fleet capacity), are potentially affected by the risk posed by attacks in the Red Sea.
What is worrying is that these diversions occur right at the seasonal peak of cargo shipments before the Chinese New Year, when there is very little capacity available from Asia to Europe and even less capacity available to the Red Sea from Asia. The Red Sea crisis has already generated panic in China over availability. of cargo capacity.
Delays also affect carriers heading to the East Coast of North America, particularly for services to and from South Asia. On this route, the impact is quite limited, given that companies can divert ships through the Suez Canal, while those passing through the Cape of Good Hope take only six days longer than before the crisis.
This is not comparable to the delays experienced by cargoes from Asia to Northern Europe. In fact, they take 10 more days, or 30% longer, while on the Asia-Mediterranean (Genoa) route, ships take 57% longer to sail.
In addition to delays in cargo deliveries, the crisis and the hijackings in the Red Sea will also cause a buildup of ships in ports, congesting them and further exacerbating container shortages and creating gaps in schedules. All of these cumulative effects can significantly affect global supply chains.
All of this could force Shipping companies are expected to adjust their schedules and possibly add more ships to meet the weekly service quotas included in their various offerings.
It is hypothesized that this crisis will peak in the weeks leading up to Chinese New Year; this period will be the most difficult for shippers and shipping companies.
The only positive aspect for the future noted by Drewry is that shipping has sufficient capacity to detour around the Cape of Good Hope and that spot rates will drop again after the Chinese New Year celebrations, at least for the American market.
