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Drone and missile attacks on commercial ships in the Red Sea have prompted global ocean carriers to re-route vessels and take other measures. Carriers have begun sharing anticipated rate increases as result of the situation.
As of Monday, 78 containerships were waiting outside the Red Sea, while 46 had made detours to the Cape of Good Hope, according to Flexport. It is 11,000 nautical miles to travel from Shanghai to Rotterdam via the Suez Canal, while via the Cape of Good Hope, it is 14,000 nautical miles. Assuming an average vessel speed of 16 knots, the latter prolongs transit times by eight to 10 days. For vessels bound for Rotterdam that are currently in the Gulf of Aden and are being diverted around the Cape of Good Hope, the incremental transit time is 13 days.
Flexport suggests that Asia-U.S. East Coast shippers send products to the West Coast to avoid the Suez and Panama canals and use railways or trucks from West Coast ports.
As a reminder, about 25% of effective capacity could be removed from impacted markets. Along with an increase in demand from the pre-Chinese New Year peak season, it is expected that rates will increase significantly, Flex port has said.
