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Update: Red Sea & The Freight Market

Merchant ships are still being attacked in the Red Sea, making re-routing around the Cape of Good Hope unavoidable. All in all, however, the situation in the sea freight market is easing somewhat and previously feared scenarios are not materialising.

  • Red Sea
  • Sea Freight

In recent weeks, the Red Sea has experienced a tense situation that has had not only a local but also a global impact on the sea freight market. Events have been exacerbated in particular by the recent Houthi rebel attacks on ships and harbour infrastructure, leading to increased tensions and risks for shipping in the region. Unfortunately, attacks on merchant ships are still taking place at irregular intervals, so the overall situation is not expected to ease.

The Houthi attacks have led to delays and uncertainties in maritime transport, resulting in bottlenecks and increased costs for companies worldwide. For security reasons, the Red Sea and the Suez Canal continue to be largely avoided. Many shipping companies have been using the alternative route around the Cape of Good Hope since mid-December, although this means a 10 to 14-day longer transit time. A change in routings back through the Red Sea is not expected in the short term.

What You Can Currently Expect on the Sea Freight Market

The backlog of cargo, which was built up before Lunar New Year and has now largely been reduced again, has eased. There are currently hardly any capacity bottlenecks on the ships, meaning that bookings and shipments can be made at relatively short notice. The freight market has already reacted and we are seeing freight rates fall accordingly. With so-called blank sailings (cancellations of departures), shipping companies are currently once again trying to artificially reduce the space on ships in order to counteract a further reduction in freight rates. The choice of departures will therefore be reduced in the coming weeks. Bottlenecks feared in the past with regard to empty container availability have not yet materialised and are not expected to occur due to the current low number of bookings.

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