According to Flexport Inc.'s latest tally, 299 vessels, with a combined capacity of 4.3 million containers, have either altered their course or have plans to do so. This marks a twofold increase from just a week ago, translating to approximately 18% of the global shipping capacity.
The diverted journeys around Africa, necessitated by the security concerns, can extend travel times by as much as 25% compared to the Suez Canal shortcut. Flexport highlights that these prolonged voyages are not only more expensive but may potentially result in higher prices for consumer goods, spanning from sneakers and food to oil, if the extended routes persist.
The attacks in the Red Sea, primarily orchestrated by the Yemen-based Houthis, ostensibly targeting ships linked to Israel in support of the Palestinians, have triggered a global response. A US-led task force is actively working to enhance security on this crucial waterway, as the conflict threatens to disrupt global trade.
Despite the risks, some ships are attempting to assert their neutrality while traversing the contested route. Currently, three vessels, including two container ships and an oil tanker, are signaling their lack of contact with Israel, according to TankerTrackers.com Inc. and ship tracking data compiled by Bloomberg.
The growing trend revealed by Flexport's data aligns with a separate count by Swiss freight-forwarder Kuehne + Nagel International AG, indicating a steady increase in vessels rerouting around Africa. The figures underscore the magnitude of the maritime disruption, with over 100 attacks on commercial ships by the Houthis in the past month alone.
Major shipping companies, such as A.P. Moller-Maersk A/S, are navigating these challenges cautiously. While some vessels have adhered to their original course or abandoned diversion plans, others are preparing to resume Red Sea transits as soon as operationally possible.
The impact of these disruptions is evident in the declining arrivals into the Gulf of Aden and Suez Canal transits. Container ship arrivals, gas tankers, and car carriers have experienced significant reductions, further exacerbating shipping capacity constraints and leading to increased freight rates.
With the potential for a 20% reduction in global capacity due to Suez diversions and constraints in the Panama Canal, the shipping industry faces an uphill battle. Bloomberg Economics warns that despite successful interceptions by the US-led coalition, the defensive strategy is expensive, with rising shipping insurance costs posing additional challenges.
As the Houthi attacks persist, the pressure on the US to take offensive measures increases, raising the specter of regional escalation. For companies grappling with cargo on detouring ships, the race to track new arrival times is intensifying, underscoring the widespread impact of the maritime turmoil.
