Latest news: Ocean Freight Disruptions in French Ports & Red Sea - Impact on Global Trade
Discover the latest updates on Ocean freight. Stay informed about strikes, delays, fluctuations in freight rates, and strategies for navigating a tense market.
Maritime Disruptions: Strikes in French Ports and Red Sea Challenges - A Global Trade Impact
Updated: February 19, 2024
Incidents and attacks over the recent months, particularly targeting commercial ships in the Red Sea region, have forced maritime companies to suspend traffic in this area and reroute ships around the Cape of Good Hope.
These events, coupled with reduced traffic through the Panama Canal due to drought affecting the country, and port congestions related to the Chinese New Year, have unfortunately had significant consequences in terms of capacity, delays, and costs. Indeed, maritime companies that announced the rerouting of their ships have also notified the application of exceptional surcharges intended to cover the additional costs incurred by the diversions.
Furthermore, strike movements currently affecting French port terminals are likely to have repercussions in the coming weeks and generate additional costs for detention, demurrage, or container connections.
National strike action in French ports
February 16, 22, and 27, 2024:
In response to the implementation of the pension reform, the National Federation of Ports and Docks (FNPD) CGT is calling for dockworkers and port agents to mobilize anew in French ports.
The plan would be as follows:
- Continuation of the elimination of overtime and exceptional shifts,
- 24-hour work stoppage on Friday, February 16, 2024,
- 24-hour work stoppage on Thursday, February 22, 2024,
- 24-hour work stoppage on Tuesday, February 27, 2024, accompanied by a "dead ports" operation.
The strike movements affecting French port terminals are likely to have repercussions in the coming weeks and to generate additional costs for detention, demurrage, or container connections.
We sincerely regret the inconvenience caused by these events, which are completely beyond our control, and we are at your disposal to answer any questions regarding their impact on your shipments.
Do not hesitate to reach out to your usual contact at QUALITAIR&SEA or to contact our customer service: experts@qualitairsea.com ☎️ +33 (0)1 34 38 29 91
Maritime Shipping Disruptions in the Red Sea: Impact on Global Trade
Overview of the current situation in the Red Sea and its impact on maritime shipping.
Updated: December 18, 2023
Major shipping Companies Temporarily suspend Journeys through the Red Sea
In recent months, the Red Sea has become a focal point of maritime tension. With the escalation of hostilities, major shipping companies have announced the temporary suspension of container ship crossings in the Red Sea. This decision, aimed at ensuring the safety of crews and cargo, is a direct response to ongoing aggression towards commercial vessels. This situation poses substantial challenges to global trade routes.
Impacts on Import/Export Operations:
This suspension is likely to significantly impact transportation costs and service levels for importers and exporters, to and from Europe, the Middle East, the Indian Subcontinent and Asia :
- Route Reorganization: In the absence of the Red Sea as a viable transit option, shipping companies are compelled to consider alternative routes. The most prominent of these is rerouting around Africa via the Cape of Good Hope. This alternative, while safer, leads to longer transit times and higher fuel consumption.
- Rising Insurance Costs: Persistent hostilities in the Red Sea region have caused a steep increase in special war insurance premiums. These heightened costs reflect the increased risk and directly impact the overall expense of ocean freight.
- Operational Delays and Increased Costs: these changes in routes, combined with higher insurance premiums, are causing significant disruptions in supply chains. Importers and exporters face extended waiting times for deliveries (7 to 20 days increased transit time on the import leg) and increased transportation costs (up to 30% additional costs for the carriers), impacting operational efficiency and profitability.
We recommend anticipating to minimize disruptions. It is crucial to plan shipments well in advance, considering potential delays and cost implications.
December 8, 2023
Attacks on Merchant Ships in the Southern Red Sea
The Red Sea, a critical maritime corridor, has recently witnessed escalating tensions. The southern region, particularly near the Bab el-Mandeb Strait, experienced heightened security concerns due to missile and drone attacks by Yemen's Houthi rebels.
These incidents, which began targeting commercial vessels in international waters, have significantly raised risks for commercial navigation and maritime security. The increase in hostile activities led to a surge in insurance premiums and heightened operational risks.
Consequently, some shipping companies began considering route diversions, notably around the Cape of Good Hope, to avoid the troubled waters, leading to extended journey times and increased fuel consumption.
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