A number of container ships are anchored in the Red Sea and others have turned off tracking systems as traders adjust routes and prices in response to maritime attacks by Yemen's Iran-aligned Houthis on the world's main East-West trade route. Attacks in recent days on ships in the major Red Sea shipping route have raised the spectre of another bout of disruption to international commerce following the upheaval of the COVID pandemic, and prompted a U.S.-led international force to patrol waters near Yemen. The Red Sea is linked to the Mediterranean by the Suez Canal, which creates the shortest shipping route between Europe and Asia. About 12% of world shipping traffic transits the canal. Major shippers including Hapag Lloyd, MSC and Maersk, oil major BP and oil tanker group Frontline have said they will be avoiding the Red Sea route and re-routing via southern Africa's Cape of Good Hope. But many ships are still plying the waterway. Several ships underway have armed guards on board, LSEG data showed. At least 11 container ships which had passed through Suez and were approaching Yemen carrying consumer goods and grains bound for countries including Singapore, Malaysia and the United Arab Emirates, are now anchored in the Red Sea between Sudan and Saudi Arabia, LSEG shiptracking data showed. Four MSC container ships in the Red Sea have had their transponders turned off since Dec. 17, the data showed, likely to avoid detection. Some vessels are attempting to mask their positions by pinging on other locations, as a safety precaution when entering the Yemen coastline, said Ioannis Papadimitriou, senior freight analyst at Vortexa. Denmark's Maersk on Friday paused all container shipments through the Red Sea following a "near-miss incident" involving its vessel Maersk Gibraltar a day earlier. A number of the ships at anchor in the Red Sea are Maersk vessels, LSEG data showed. On Tuesday it said vessels previously paused and due to sail through the southern Red Sea and the Gulf of Aden would be rerouted around Africa. The Iran-backed Houthis, who say they are supporting Palestinians under siege by Israel in the Gaza Strip, have waded into the Israel-Hamas conflict by attacking vessels in vital shipping lanes and even firing drones and missiles at Israel, more than 1,000 miles from the Yemeni capital Sanaa. Houthis attacked two commercial shipping vessels in the southern Red Sea on Monday.(LINK) Industry sources say the impact on global trade will depend on how long the crisis persists, but insurance premiums and longer routes would be immediate burdens. Vortexa's Papadimitriou on Tuesday said the price of a Suezmax to carry crude from the Middle East to Europe has risen 25% in a week. The disruption to energy flows in the Red Sea is unlikely to have large effects on crude and liquefied natural gas (LNG) prices, Goldman Sachs said on Monday, as vessels can be redirected. "We do estimate that a hypothetical prolonged redirection of all 7 million barrels per day of gross (Northbound and Southbound) oil flows would raise spot crude prices relative to long-dated prices by $3-4/per barrel," the investment bank said. An Asian buyer of naphtha, a petrochemical feedstock imported from Europe, said their vessels were still using the Red Sea route as it would take another 7-14 days to re-route via Cape of Good Hope. Some oil tanker owners are inserting a new clause to include a Cape of Good Hope option into their shipping contracts as a precautionary measure, shipbrokers said. A person familiar with Alibaba's Cainiao logistics arm said they may see slightly longer delivery times and shipping fees, but overall the re-routing would have little impact on business. (Reporting by Florence Tan, Trixie Yap and Naveen Thukral in Singapore, Yousef Saba in Dubai and Casey Hall in Shanghai; Writing by Lisa Barrington in Seoul; Editing by Michael Perry) Ocean freight demand on most trade lanes is not meaningfully increasing, and space continues to trend higher than demand. In parallel, additional capacity continues to be added to the global fleet as the record number of new vessels ordered by steamship lines over the past few years continue to get delivered. However, the current low water level of the Panama Canal, and its effect on capacity, is another reminder of how external events impact the industry. More details on this to follow. Asia Rate gains on shipments traveling from Asia to Europe are likely to hold for the month of December due to stronger capacity utilization supported by traditional year-end cargo demand. Trans-Pacific rates are not holding as strong due disruptions at the Panama Canal, which affected the East Coast. THE Alliance carriers have been forced to divert all three of their Panama all-water services to avoid lengthy delays at the Canal. Due to the Panama disruptions and more backhaul moves, Asia–Europe and U.S. East Coast (USEC) routings via the Cape of Good Hope have helped partially mitigate the continual new vessel deliveries with the run rate maintained at over 200,000 TEUs a month, after taking into account the deletion of older ships from scrapping. Europe The extension of EU ETS limitations on ocean shipping starting January 1, 2024, is by far the largest disruption for this region. Read this month’s top story above for more details on this topic and its potential impact on your business. Be sure to work closely with your C.H. Robinson representative to navigate these changes. Latin America Panama Canal restrictions Due to low water levels, the Canal Authority has incrementally limited the number of vessels transiting through the canal per day. By February 2024, it is estimated only half the number of slots will remain compared to before the drought. This creates three main challenges:
While the current post-pandemic market has brought relief in many aspects for shippers, it is important to keep in mind that planning and flexibility remain key to protect your supply chain. El Niño phenomenon A more rain-intensive spring has resulted in a decrease in the scheduled volumes of export fruits, reducing the projected shipments from South America to various markets. This includes a reduction in cherry volumes to be shipped, which will be lower than anticipated. A recent study reports a remarkable 17.5% increase in available TEUs for services to the region in 2023. The total capacity of the container fleet traded to/from and within Latin America has increased by almost 562,000 TEUs in the last twelve months. While there has been a decrease in imports to the region, the push for exports from South America to various destinations has been constant due to the seasonal commodity diversity of different countries. Shipping lines are focused on increasing volumes and offering competitive rates in the coming months if necessary. Chile DP World Callao has received 15 new, 100% electric cranes for the Bicentennial Dock. The cranes—3 dock cranes and 12 yard cranes—will increase the loading and unloading capacity at the terminal by 80%, reaching a total capacity of 2.7 million TEUs. This initiative will also reduce emissions by 30% as the cranes utilize 100% renewable energy. Colombia A 20% decrease in Colombian imports means there are container imbalances for some shipping companies. Expect difficulties in replenishing empty containers for export. Brazil The Brazilian coast is struggling with a lack of 20' containers and special equipment. Exporters' forecasts must be considered at least two weeks in advance (on average) to have equipment repositioned and available. The summer season is impacting the ports in southern Brazil, and excessive rainfall has flooded cities in this region. Navegantes Port closed during the entire month of October, and there still is a backlog. There is no normalization foreseen to operations due to the adverse weather conditions expected. In the north region, Manaus and Vila do Conde Ports are facing several droughts, and the water level is too low. Port capacities are reduced and ships must operate lighter than usual. Most carriers are applying the low water surcharge (LWS), and transshipping can occur. North America Canada The Port of Montréal contract expires December 31, 2024. Negotiation teams continue to discuss demands, but initial discussions are appearing unfavorable. Dock workers at the Port of Montréal are seeking wage increases of at least 20% over four years and full job security after three years. Given the historical challenges in negotiations at this port, compounded by the recent Vancouver strike, anticipate a protracted negotiation period. As news breaks, review C.H. Robinson client advisories for more detailed information. United States U.S.–Asia
U.S.–Europe
U.S.–LATAM
U.S.–Oceania
U.S.–SAMA
Asia–Europe
Oceania The Trans-Tasman market has continued to soften. Space and equipment availability is still widely open. Rates are being reviewed regularly with the introduction of new options in this trade lane. Direct carrier space is stabilizing from the USEC and continues to be open off the USWC while trans-shipment service options are widely available. Rates have stabilized with supply versus demand being okay. The Europe to Oceania market continues to see direct carriers trying to hold market share. Rates are revised in small increments as supply continues to outweigh demand, with space and equipment readily available for dry cargo. Northeast Asia supply continues to tighten as carriers increase blank sailing/port omissions, while demand remains steady from Southeast Asia to Oceania. General Rate Increases (GRIs) are being implemented from Northeast Asia to Australia, Australian East Coast ports, and New Zealand. Export rates are under pressure. Wastepaper, grain, wool, and cotton/cotton seed are still moving in large numbers with load factors strong for the next month but is coming up against constant competition and rate pressure. It is difficult to forecast 20' GP/food quality capacity for Melbourne and Adelaide during solid grain season. Feeder space to ISC is tight across most carriers with small allocations against demand from Singapore. SAMA In South Asia, across various trade routes, market conditions are stable with relatively open capacity and low spot market rates. However, tight space and increasing rates in Pakistan are notable due to the ongoing mango season, while potential disruptions in the Middle East, particularly in Israel, may impact services in that region. In the Middle East, overall market conditions are strained, marked by tight capacity and mid-level spot market rates, particularly from the Gulf, with potential service disruptions due to the conflict in Israel. However, there is a trend of decreasing rates and available space out of Turkey, providing some relief in certain trade routes. In African trade routes, market conditions vary, with generally stable conditions in Asia and Oceania, but strains in routes to Europe and North America due to tight capacity and mid-level spot market rates. Notably, North Africa rates are consistently up. Recommend booking in advance for certain regions, while conflicts in the Middle East and holiday seasons impact rates and space availability. Where are the biggest surf waves in California?HALF MOON BAY, California, Dec 28 (Reuters) - At the famous Mavericks Beach surf spot, big waves thundering into the California coastline on Thursday attracted surfers and spectators alike to the legendary break 25 miles south of San Francisco. |
