Container xChange Warns on Suez Supply Chain Problems

As tensions continue in the Middle East, here is some analysis from Container xChange;

The unfolding events in vital maritime passages such as the Red Sea, Suez Canal, and Panama Canal have prompted swift responses from major shipping companies, thereby impacting the container shipping sector. An additional 40% longer route, causing heavy upward pressure in the operating costs is expected to persist as the shipping time extends anywhere between one to four weeks due to the longer route.

“The situation in the Red Sea has been escalating quite significantly over the last two weeks where Houthi rebels have started to attack the commercial vessels by the big ocean liners. Subsequently the container liners are essentially instructing their vessels to avoid transiting through the Suez Canal and around the Cape of Good Hope adding quite a significant delay and time to their East to West trade journeys.” said Christian Roeloffs, cofounder and CEO, Container xChange, a prominent online container logistics platform for container trading and leasing.

Container xChange reported about the potential disruptions and implication on the Suez Canal in October this year right after the start of the Israel – Hamas – Palestine conflict.

“Now the shares of shipping lines have jumped in anticipation of a post-COVID disruption revival. It will all depend on how navies take this up. Egypt has a significant commercial interest in the functioning of the Suez Canal as it is one of the main revenue drivers and if the diversion happens then it will have a significant impact there.” Roeloffs added.

“As of now, the traffic at the Suez Canal and the Red Sea looks healthy but that can turn around very quickly. If we go by history, then the situation of the Ever Given did create a lot of traffic jam a few years ago, the repercussions of which were felt for months.” added Roeloffs.

Recommendations for Container xChange Users:

• Monitor Shipments Closely:
  • Stay updated on the status of your shipments and vessel schedules.
  • Be prepared for potential delays and adjustments to delivery timelines.
• Evaluate Cost Implications:
  • Assess the potential impact of rising war risk premiums on freight costs (freight rates have already shot up by 20% as reported by Xeneta).
  • Consider alternative routes and their associated operational expenses.
• Communication with Partners:
  • Maintain open communication with shipping partners to stay informed about changes.
  • Collaborate closely with carriers to address any specific concerns or requirements.

Container xChange remains committed to providing support and updates as the situation unfolds. If you have specific queries or require assistance, please reach out to our customer support team.