Customer update regarding shipping disruptions in the Red Sea - 2/1/24

The new year long weekend again brought further developments to the disruption caused by Houthi rebel attacks on merchant vessels in the Red Sea.

US Military sources have reported two attacks against Maersk Hangzhou within 24 hours over the weekend. The first, on the evening of December 30, was a missile attack. The second attack on the morning of December 31 involved 4 Houthi rebel boats attempting to board the vessel. The rebels managed to get within 20 metres of the ship, but two US destroyers provided support and 3 of the 4 boats were sunk with no survivors. The 4th boat escaped. Thankfully, the Maersk crew has reported no injuries and the vessel remains seaworthy.

Since these latest attacks, Maersk has announced that they will pause any planned transits through the Red Sea to further assess the situation over 48 hours. We expect further updates on this in the early part of this week.

The shipping lines are assessing the situation in their own time and taking varying stances. At points over the last few weeks, there has been several days between Houthi rebel attacks, but despite this, the threat remains high and the situation remains extremely fluid.

Equipment
Equipment availability is increasingly becoming an issue and we expect this to get worse through January as the return of vessels to Asia are delayed.

Space / Blank sailings
Vessels due to depart China in Jan H1 are almost full and those due to depart in the second half of the month are nearing capacity, so space is tight and will get tighter as vessels are unable to get back to Asia as scheduled. The latest information we have is to expect a 20-30% capacity reduction from the third week in January. This may lead to an increase in blank sailings as we approach the Chinese New Year period (10th Feb 2024).

Mitigating risk in this constantly evolving situation
One of the best ways to manage risk in this crisis is to encourage suppliers to make their booking as early as possible. We strongly recommend suppliers book in 3-4 weeks before vessel departure.

Our customer teams will continue to inform customers directly on how their supply chains are impacted. Please get in touch with your regular point of contact to discuss your options and get the latest information on this dynamic situation.