Dear Valued Customer,
Over the past week, more than 25 vessels have been rerouted to the Cape of Good Hope from the Suez Canal. That number will likely continue to grow due to ongoing war risks in the Red Sea and the drought in the Panama Canal.
Since 29% of global ocean traffic travels through the Suez Canal, be advised that rerouting or pausing even a portion of those vessels can have a significant impact, not just to trade that moves via the Red Sea, but across all global trade lanes. Blank sailings and rate increases are expected to continue across many trades into Q1 of 2024.
As capacity continues to tighten, carriers will likely reshuffle vessels to trade lanes with the most demand, in some lanes we are already seeing this happen. Be advised, the industry could also experience an equipment imbalance, particularly in Asia, as delays in backhaul services will reduce the number of empty boxes available. It is highly recommended that bookings are made 4 to 6 weeks in advance in order to provide space and equipment.
Air freight could also be impacted as shippers consider contingency plans which could include a combination of sea and air freight solutions or traditional air freight. Expedited inland services and transloading at the ocean port are also options for shippers to consider when they need to make up time from elongated transit or other delays.
While rerouting and pausing services will impact all trades lanes, it won’t be at the same level. Reach out to your local C.H. Robinson representative to discuss your specific shipments and the solutions available.
Thank you for being a Valued Customer. If you have any questions, please do not hesitate to contact us for further information.
Sincerely,
C.H. Robinson
View our previous Red Sea/Suez Canal advisory here.