Exporters using the Red Sea as a route are scrambling to find ways to ship essential consumer goods to buyers, such as by air, as a wave of attacks in those waters causes problems in the sea freight supply chain elsewhere.
Iranbacked Houthi fighters in Yemen have stepped up attacks on ships in the Red Sea since November 19 to show support for Hamas as Israel's military offensive in the Gaza Strip continues.
The attacks have disrupted a key trade route linking Europe and North America to Asia via the Suez Canal and significantly increased the cost of shipping containers as companies now look for alternative, often longer, routes.
Companies are now looking to switch to socalled intermodal shipping, which combines air and sea routes, to maintain global supply chains, said Jan KleineLasthues, head of air freight at Hellmann Worldwide Logistics, a major German shipping company.
This means that the goods will first be transported by sea to a port in Dubai, from where they will be transported by air, he said.
“This alternative route allows customers to avoid the Red Sea danger zone and the long journey around the southern tip of Africa,” KleineLasthues told Portal.
Hellman has seen an increase in demand for combined routes that include air and sea routes for consumer goods such as apparel and electronics and technology items, he said.
“Given the current situation, it is likely that many shipments will become stuck in containers in the Red Sea or be delayed due to diversions around the Cape of Good Hope. This delay could impact retail operations in Europe and America as it comes as a surprise,” he added.
Container freight prices on routes from Asia to Northern Europe have risen 14% since the diversions were announced last week, according to analysis by global freight platform Freightos.
About 35,000 ships sail through the Red Sea region annually, transporting goods between Europe, the Middle East and Asia, accounting for about 10% of global GDP, said Corey Ranslem, managing director of British maritime risk security consultancy Dryad Global.
“If the threat persists, prices for fuel and goods to Europe will increase significantly due to higher rerouting costs around Africa, which could result in an increase in transit time of around 30 days, depending on the port of arrival,” he said.
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