Customer update regarding shipping disruptions in the Red Sea - 3/1/24

US Central Command reported overnight that Houthis fired two anti-ship missiles into the Red Sea on the evening of January 2. Multiple commercial ships reported the impact of missiles into the water, but no damage was reported. This is the 24th attack against merchant ships since November 19.

Despite it being over 6 weeks since attacks began, the perception in the market still appears to be that this is short term disruption. But, even when vessels do start reliably transiting through the Red Sea again, it is likely to take months before the flow of vessels and containers return to normal.

While we remain hopeful for a quick resolution, the team at Ligentia is now preparing for this disruption impact supply chains through Q1 and into Q2 2024.

Meanwhile, shipping lines continue to assess the situation at their own pace and are taking varying approaches.

One thing to note is that whilst most of the conversation has been around the impact of the disruption on the Far East West Bound trade lane, disruption is also effecting trade between Asia and the US – overnight it was noted that Gudrun Maersk going from USEC to Asia has taken the decision to divert south around Africa rather than going through the Mediterranean. Similarly, cargo moving between Europe and Oceania is also effected by delays and surcharges to cover rerouting around the African coast.

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).

Preparing for future bookings
Suppliers should be making their booking as early as possible – at least 3-4 weeks before vessel departure. We expect scheduling challenges to continue to be a problem over the next few months, so please plan ahead.

Please get in touch with your main Ligentia point of contact if you wish to discuss your specific situation and get the latest available information on the disruption.