Shipping Rates Climb as Red Sea Disruptions Continue
As the Red Sea shipping situation continues to heat up, as of today, more than a 100 ships have been diverted around the Cape of Good Hope.
OOCL is the latest major shipping line to have announced that it is avoiding the Suez Canal.
CEVA Logistics has issued the following statement: “The reported attacks on commercial shipping vessels are leading many of our ocean shipping partners to take preventative measures to ensure the safety of their crews, vessels and customer shipments.
"In addition, some carriers are adding related surcharges. We do expect some delays due to re-routed vessels, and we are optimizing route decisions accordingly."
For now, the rerouting is being done despite the Pentagon announcing that more than 20 countries have agreed to participate in the new US-led coalition to safeguard commercial traffic in the Red Sea from attacks by Yemen's Houthi movement.
These diversions have forced shipping lines to levy significant contingency charges that shippers will have to bear for all cargo that was originally supposed to pass through the Suez Canal.
Meanwhile, spot rates are zooming even as lead times are stretching and becoming increasingly uncertain.
For sailings from January 1, 2024 onwards, all shipping lines have announced fresh surcharges "until further notice."
Future sea cargo insurance rates have also begun to climb making planning and projections all the more harder for cargo owners.
The current situation is a dramatic U-turn from the downward trend that freight rates have followed this year as sea freight rates were returning close to pre-pandemic levels.
Meanwhile, some of the more enterprising shipping lines and freight forwarders have already started offering various categories of shipping services, like high priority and regular, to customers.
Cargo owners today must be an unhappy lot as sadly, the buck stops with them and they are the ones who will have to bear the ultimate cost of this disruption.
Read More: East-West Trade Braces for Higher Freight Costs in 2024
