Hello Customers, Colleagues, and Friends…
As we begin 2024, we look forward to a prosperous year for all of you. There are some issues pressing the industry that we feel you all should be aware of. Political unrest and violence in the Red Sea and Chinese New Year is on the horizon.
Major shipline carrier, Maersk, is warning customers to be prepared for complications due to the ongoing security issues in the Red Sea and Gulf of Aden. Along with the potential for “significant disruption to the global network,” as they extended their decision to divert vessels from the area for the “foreseeable future.” This is due to 25+ targeted attacks on container ships traveling the Suez Canal in relation to the Israel-Hammas war in the region. This is already having a huge impact on the market in a short period of time, causing increased transit times and freight rates for nearly all trade lanes. The disruptions will be prolonged across the industry as nearly 20% of vessels are completely avoiding the area.
In addition, the Chinese New Year is on the horizon. This major Chinese holiday, celebrated February 1-17, regularly causes spikes in freight rates and potential capacity issues for freight departing China before the shutdowns. We recommend our customers book well in advance during this period to avoid delays or disruptions in their supply chains. Or, if freight is not time sensitive, to consider postponing orders until after the holiday. Ocean costs from China have almost doubled and Europe has increased 50% since Mid December. Expectation is that Sub Continent will increase 50% in February.
WHAT THIS MEANS FOR YOU
- Increased International freight rates, especially China to US. In some instances, doubled and expected to continue to increase as holiday nears
- Disrupted sailing schedules causing delays across many trade lanes
- Lengthened transit times on certain trade lanes for foreseeable future
Please continue to plan accordingly for your import, export, and domestic transportation needs.
Sincerely, Your friends at Krenz and Hannan International
SOURCES
https://www.ttnews.com/articles/shipping-panic-houthis-trade
https://www.maersk.com/logistics-explained/seasonal-trends/2023/10/02/chinese-new-year-2024