BIFA has received several messages from Members regarding the recent attacks on shipping in the Red Sea, and we have been liaising with other trade associations on this subject.
The situation appears to be very fluid and some of the messaging has led to confusion. Individually the shipping lines have taken actions that they deem to be appropriate in the circumstances. Also, the role of the naval task force that has been assembled has yet to be clarified. The task force’s effectiveness in deterring Houthi forces from attacking container ships, as evidenced by their unsuccessful attack on the Maersk Hangzhou on the 31st December 2023, is also unclear.
Some shipping lines had been indicating that they wish to return to using the Red Sea/Suez route when the security situation has been stabilised, however, this most recent attack has led to further cancellations and diversions.
It is important to note that the situation affects vessels carrying import and export cargo to and from Europe eastwards and westwards; in particular from China to Europe.
The following list outlines some of the consequences that are causing significant disruptions in global supply chains:
Longer transit times
- Higher freight rates and surcharges
- Considerable disruption to sailing schedules
- Blank sailings
- Container imbalances
- Increased demand on alternative transport modes and routes
- Increased carbon emissions
- Higher insurance premiums
It’s important to note that different markets are experiencing these challenges in varying forms and magnitudes.
This is a complex and volatile situation with considerable variations between how individual carriers are responding to it. In many ways the best source of information is from the trade press and the carriers themselves.
One reason to provide this summary of the present situation is so that Members can provide information to their clients regarding the gravity of the problems.
