The "Red Sea Crisis" caused a huge impact! Shipping capacity dropped by 57%! Industry, automobiles, and food supplies were blocked!
The "Red Sea Crisis" caused a huge impact! Shipping capacity dropped by 57%! Industry, automobiles, and food supplies were blocked!
Since the outbreak of a new round of Palestinian-Israeli conflict, Yemen’s Houthi armed forces have repeatedly attacked and seized commercial ships in the Red Sea waters. Many shipping companies (agent shipping china）announced that they would suspend the Red Sea routes and instead bypass the Cape of Good Hope at the southern tip of Africa.
Recently, the Danish "Shipping Intelligence" consulting company stated that the increase in transportation time and cost has led to a significant reduction in the effective capacity in the shipping market. The company warned that global supply chains were more damaged than at the beginning of the global COVID-19 pandemic.
According to a latest report from the Danish "Sea Intelligence" consulting company, the weekly Red Sea shipping capacity index fell by 57% in December last year compared with the annual average, exceeding the 47% decline in March 2020 at the beginning of the new crown epidemic.
Company officials said this was the second-largest drop on record. Only March 2021 exceeded this drop, at 87%. At that time, the heavy cargo ship "Changci" ran aground in the new channel of the Suez Canal for six days, causing the most serious blockage in the Suez Canal's more than 150-year history and bringing billions of dollars of trade to a standstill.
The report believes that frequent attacks on merchant ships in the Red Sea have had a serious impact on the global supply chain, exceeding the initial impact of the COVID-19 epidemic.
It is understood that as of early January 2024, global container ship capacity has increased by 8% year-on-year, and the scale of orders on hand accounts for 24.71% of the existing fleet size.
The Red Sea has always been an important waterway connecting Asia(agent shipping china), Europe and Africa. Shipping companies have changed routes, resulting in increased ocean shipping freight and weeks-long delays, disrupting the global logistics supply chain and affecting many industries.
According to the "Nihon Keizai Shimbun" report, on the routes connecting Europe, the United States and Asia, the transportation of about 47% of toys, 40% of home appliances and clothing may be affected by rising freight rates and delayed arrivals.
In terms of industrial raw materials, 24% of chemicals, 22% of automotive steel plates, and 22% of insulated wires and batteries will be affected, and some raw materials will even be difficult to deliver.
Companies such as electric vehicle manufacturer Tesla and automaker Volvo have recently said that some of their factories have been forced to suspend production.
In addition, the Red Sea crisis affects European food imports and exports, including the export of European dairy products, meat products, wine and other products, as well as the import of tropical fruits, coffee beans, tea, spices, poultry and other products.
In an interview with foreign media, Maersk CEO Ke Wensheng warned that if the problem of suspended sailings and detours in the Red Sea is not resolved, ships will soon become dislocated, thus threatening the global logistics supply chain.
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