Global Shipping Faces Prospect Of Red Sea Diversions All Year

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  • Widespread container-shipping detours to avoid Houthi attacks in the Red Sea are expected to extend well into the second half of this year and maybe into 2025.
  • Insights from industry experts shed light on the duration of these diversions and the factors influencing them.

Alan Murphy, the founder of Sea-Intelligence, emphasized that shipping lines would not reroute networks through the Suez Canal until it’s safe to do so. Even if the conflict were resolved tomorrow, a return to normal Suez transits would not be immediate. Long-term assurances of safety in the Red Sea are essential, and it could take six to 12 months for stable networks to resume through the Suez.

CEO Insights – Rolf Habben Jansen, Hapag-Lloyd

Rolf Habben Jansen, the CEO of Hapag-Lloyd, highlighted the increased transit time of seven to 10 days via the Cape of Good Hope due to safety concerns. While stability has returned after months of attacks, the timeline for resuming Suez shortcuts remains uncertain. However, Jansen expressed a more optimistic outlook, suggesting a return to normal services through the Suez in 14 to 17 weeks once the crisis is resolved.

Forwarder’s View – Thorsten Meincke, DB Schenker

Thorsten Meincke, a member of the management board for air/ocean freight at forwarder DB Schenker, indicated that the Red Sea turmoil could persist throughout the year. He suggested planning for continued diversions throughout 2024, anticipating a resolution unlikely in the near term.

The consensus among industry experts is that the duration of Red Sea diversions hinges on the resolution of geopolitical and military conflicts in the region. While some anticipate a prolonged disruption, others hold more optimistic views, but uncertainty prevails regarding the timeline for a return to normal shipping routes.

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Source: Bloomberg