With the escalation of the conflict, the four major shipping giants have suspended Red Sea transportation, the Suez Canal, the "main artery" of shipping, is facing the risk of closure, and the cost of shipping is facing the risk of jumping in the short term, making the global supply chain even worse. In addition, according to The Paper, it was learned from the freight forwarder that due to the impact of the international situation, COSCO Shipping, Orient Overseas Container (OOCL) and Evergreen Shipping (EMC) have verbally notified the suspension of cargo on the Red Sea route. ONE Marine Network Shipping has also given verbal notice to suspend cargo handling on the Red Sea route.
The four shipping giants suspend Red Sea shipping The Bab el-Mandeb Strait, a narrow passage only 20 kilometers wide, had a clear north-south shipping lane for safe passage before the conflict, and is responsible for about 10 to 12 percent of the world's trade traffic, with as many as 17,000 ships passing through the area. Mediterranean Shipping and France's CMA CGM halted container ship sailing through the Red Sea last Saturday, according to the latest media reports on Sunday. On Friday, media reported that the two shipping giants, Maersk and Hapag-Lloyd, both confirmed that they had suspended all sailing plans in the Red Sea and the Bab el-Mandeb Strait following the recent escalation of the Red Sea conflict. The shipping industry is calling for immediate action to stop "flagrant violations of international law". Maersk, the shipping giant that operates the world's second-largest container fleet, said in a written statement:
We have instructed all Maersk vessels in the area that are about to pass through the Bab el-Mandeb Strait to suspend sailing until further notice, while expressing deep concern about the highly escalating security situation.
Hapag-Lloyd also said after confirming that one of its container ships was attacked while sailing close to the Yemeni coast:
More measures will be taken to ensure the safety of the crew, and Hapag-Lloyd will suspend all container ship traffic via the Red Sea until next Monday (December 18).
The statement by the two shipping companies came a day after media reports said Maersk was considering rescheduling ships to circumnavigate Africa and avoid the Red Sea. The International Chamber of Shipping also said that some companies have already diverted routes near the Cape of Good Hope, which will increase global trade costs and delays. It is reported that the industry is considering more actions, which could lead to more vessel diversions.
The Suez Canal may be closed and transportation costs may jump in the short termAs the conflict intensifies, the global shipping market is in turmoil. Peter Sand, principal analyst at maritime consultancy Xeneta, said of the impact of the conflict on the trade and shipping industry:
The closure of the Suez Canal is highly unlikely, but there is still such a risk.
Global shipping is expected to see some kind of overreaction in the short term, and the cost of trade through the Suez Canal could jump.
The only option for shipping companies to avoid the Red Sea and the Bab el-Mandeb Strait is to make a detour to the Cape of Good Hope at the southern tip of Africa, which will add 10 days to the voyage.
The previous article pointed out that the severe drought has restricted the Panama Canal, and the intensification of geopolitical conflicts has forced ships to bypass the Suez Canal, which will be a catastrophic blow to global shipping. Inga Fechner, economist at ING, said:
Sluggish global demand has weakened the impact on commodity and consumer prices. But in the long run, higher shipping costs will have a trickle-down effect that will ultimately hit consumers. Costs are getting higher and higher, and finding alternative routes will increase costs and may ultimately affect prices as well.
In response to the recent situation, the World Shipping Council issued a statement calling for action, and the European Community Shipowners' Association and the European Transport Workers' Federation issued a joint statement calling for "immediate action to urgently address this worrying situation". ⭐ Star Wall Street news, good content do not miss ⭐ This article does not constitute personal investment advice, does not represent the views of the platform, the market is risky, investment needs to be cautious, please make independent judgment and decision-making.