Red Sea is one of the most important maritime routes in the world for the transportation of goods, serving as the shortest route between Europe and Asia.
This maritime corridor supports between 12% and 15% of global trade and 20% of global container transport.
However, as we have recently observed, this route has been affected since October 2023 by a series of armed conflicts. In particular, the Houthi group from Yemen has launched repeated attacks on transport vessels in the Red Sea, causing serious implications for global trade.
What are the consequences of this situation?
Changes in Maritime Traffic
According to a report by the International Maritime Organization, since the onset of these geopolitical tensions, 43 attacks have been recorded against international vessels transiting the Red Sea and the Gulf of Aden.
This threat to a key maritime route has led to a diversion of routes, increasing ship traffic along the alternative route around the Cape of Good Hope by 100%.
Longer Routes
Additionally, the Panama Canal, one of the other alternative routes, is facing drought issues that impede navigation, further extending transit times.
The diversion of ships to the Cape of Good Hope, with longer transits, has reduced market capacity, significantly impacting the logistics sector. The shortage of sailings and cancellations are causing delays and stoppages that inevitably affect the global supply chain.
Impact on Prices
Longer journeys and increased navigation speeds to compensate for delays are generating additional fuel costs and, consequently, higher charter rates.
According to data from the consultancy Drewry, the cost of transporting containers on major maritime routes has increased by up to 16% for 40-foot containers compared to the previous week.
Moreover, due to high demand and limited logistical capacity, further increases are anticipated in the coming weeks.
Other Aggravating Factors
Conflicts in the Red Sea are not the only factors affecting the supply chain. The recent conflict in Israel has increased instability in the region, also impacting nearby trade routes. Additionally, the accident at the Port of Baltimore, which involved several damaged containers and a temporary port closure, has added more pressure on logistical routes. These events have created additional bottlenecks, exacerbating delays and further increasing transportation costs.
Solutions?
At GM Technology, we want to inform our network of partners and collaborating companies about the challenges facing the international logistics sector, which could result in temporary surcharges on product purchases.
We also commit to continuing our efforts to provide the best service, adapting to the current situation, and ensuring that every order arrives as quickly as possible.
Feel free to get in touch for more information about the status of the supply chain or access your customer area on our online portal to get all the details about your order.
Sources:
(1) Mundo Marítimo
(2) We Forum
(3) El Mercantil
