Red Sea Attacks Delaying Shipments

Red Sea Attacks Delaying Shipments
March 1, 2024 Hannah Marshallsay

Delays and additional costs resulting from the diversion of vessels around the African Continent persist. However the Chinese New Year holiday brings stablisation to container shortage and capacity pressures.

With no indications of de-escalation in the conflict and the ongoing risk of attack, all major container carriers have now adjusted schedules to fully reflect the Cape of Good Hope routing. This diversion is adding an additional two weeks of transit for cargo destined for Europe and the UK, and is also incurring increased fuel and operational costs. The prolonged transits are having ripple effects across supply chains, leading to operational delays in shipments.

Experts suggest that the US-led campaign of joint anti-Houthi military operations in Yemen and the Red Sea may have started to make a dent in the capability for further missile attacks on shipping. However, indications point to the likelihood of the current situation persisting for several months and possibly for the rest of this year.

On a more positive note, container shortages are no longer a concern as the Chinese New Year has offered a respite, allowing for equipment balance to be restored. Following the closure for the holiday, factories in China have resumed operations, signaling a return to normal manufacturing activities. As the post-Chinese New Year period tends to be quieter compared to the peak period prior, carriers will be adjusting their capacity accordingly with the deployment of blank sailings in March to align capacity in their networks with the decrease in demand.

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