- Insurer Swiss Re has come up with a chart to highlight the dramatic changes to the world seaborne map in recent years.
- The chart is drafted as shipping faces disruption in the Red and Black Seas as well as the Panama Canal and multiple drying up rivers.
Attacks on ships in the Red Sea and drought in the Panama Canal area have more than quadrupled shipping prices since late 2023. According to Swiss Re, impacts could worsen should disruptions persist into the peak shipping season in the second half of the year, reports Safety4sea.
As Swiss Re informs, marine insurance contracts in affected areas are repricing higher or covers being adjusted, while some claims inflation is a further potential risk. Pressure on global shipping routes is creating stress in global supply chains again, soon after the acute disruption experienced in the pandemic.
Key findings
- Red Sea shipping attacks and drought around the Panama Canal are creating supply chain disruption and stress.
- Spot shipping prices are more than 4x higher than before the attacks began. Price rises may intensify if disruption persists in the peak shipping season of H2 2024.
- Marine insurance is the main impacted line, with premiums rising to account for the higher risk, and coverage being flexibly adjusted.
- Stickier claims inflation is a risk too if core goods inflation starts to tick up again.
- Other crucial shipping channels are vulnerable to geopolitical risk, while climate change increasingly threatens the Panama Canal and river shipping.
Red sea attacks and their impact
Attacks on ships in the key Red Sea route from Asia to Europe since November 2023 are causing many shipping companies to reroute around the Cape of Good Hope in South Africa. According to Swiss Re, this can add 20-30 days and 11 000-15 000kms to a typical round trip, so is creating long delays and higher shipping costs for exporters. Spot shipping rates between Northeast Asia and Western Europe – which apply to ad-hoc or short-term contracts and orders for port-to-port deliveries – were more than four times (440%) higher in January 2024 than in October 2023.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe!
Source: Safety4sea
Hello Neat post Theres an issue together with your site in internet explorer would check this IE still is the marketplace chief and a large element of other folks will leave out your magnificent writing due to this problem
you are truly a just right webmaster The site loading speed is incredible It kind of feels that youre doing any distinctive trick In addition The contents are masterwork you have done a great activity in this matter