The situation in the Red Sea is becoming increasingly tense and confrontational. This has prompted significant alterations in global shipping routes, directly affecting the logistics and international removals industry. At John Mason International, we recognise the significant impact that these route changes have on your shipments. The alteration in shipping paths is expected to have four key effects, not only on the shipping and removals sector but also on daily life.
Longer transit time
The first impact is on transit times. The vessels are now being diverted via the Cape of Good Hope, which routes vessels via the southern tip of South Africa. This is adding approximately an average of 10–15 days to transit times to most places, but these transit times may grow depending on vessel routings and final destinations. This also means that vessels are running way behind time on their journey, which. This can lead to equipment shortages due to containers not being offloaded in time at ports which means they cannot be used to export goods.
Vessels being displaced
The second impact is on vessels being displaced. This means that shipping lines may decide to miss out selected ports to try to manage the transit times. Shipping lines can do this and off load containers en route at alternative ports. If this happens, the responsibility can be put on the shipper to deal with this issue and arrange to have the container routed to the correct port. There will be cost implications to this in the unlikely event that this situation arises, which will have to be covered by the shipper.
Shipping cost increases
The third impact is a surge in shipping costs. Most of the shipping lines have placed an emergency surcharge on all containers being shipped from approximately 1st January onwards. Most have imposed them on any container shipped from this date, but we are aware of one shipping line that back dated the charge for any container that was either shipped or on the water from 15th December 2023. These sums range from USD500.00 to USD1500.00 per container.
Unbelievably, some lines have even surcharged containers destined for North America even though these vessels do not go anywhere near the Suez Canal and Red Sea. The logic behind these surcharges is that the Panama Canal is experiencing low water levels. Therefore, not as many vessels are able to use this route and vessels are being held up before entering the Canal. There are rumors that the Panama Canal authorities are giving preference to cruise liners over commercial vessels, but this has not been confirmed.
Cost of living impact
The final impact is a broader economic one, influencing the cost of living. The increased costs borne by shipping lines inevitably trickle down to consumers. This situation is expected to escalate prices of goods in stores, as well as fuel and other essentials, contributing to a rise in the general cost of living.
What does this mean for John Mason International Customers?
In response to these developments, John Mason International is actively adapting to ensure the safety and compliance of our shipments. Several vessels, including those awaiting transit through the Suez Canal, are currently on hold, with re-routing around Africa being a common recourse. We urge our customers to be prepared for potential delays and changes in schedules. Our commitment is to keep you thoroughly informed and to the impact on your shipments as efficiently as possible.
We appreciate your patience and understanding during these challenging times. Our team is dedicated to navigating these complexities and providing you with the best possible service under the current circumstances. Rest assured, we are closely monitoring the situation and taking every necessary step to manage these unforeseen challenges effectively.