The Red Sea is Now Largely Closed to Traffic, Affecting 8.8 Million bpd of Daily Oil Transit, and Nearly 380 Million Tons of Daily Cargo Transit
By Dissident Thoughts
The Red Sea is now largely closed to traffic, affecting 8.8 million bpd of daily oil transit, and nearly 380 million tons of daily cargo transit. Global traffic now will be rerouted around Cape of Good Hope, adding on average 40% to voyage distance and even more in expense.
The collective vessel market share of MSC, Hapag-Lloyd, and Maersk — each of which are recent victims of piracy attacks and have decided to suspend voyages via the Red Sea — is approximately 40% of global cargo trade. Transit times from Asia to the Mediterranean were at a threshold last month, and are now expected to rise up to an additional 10-14 days.
Meanwhile, global sea freight faces additional risks in the Western hemisphere as drought conditions plague the Panama canal.
Sue Terpilowski of the Chartered Institute of Logistics and Transport, which represents companies concerned with supply chains, told the BBC about the likely spike in costs after four of the top five companies in the world suspended operations in the area:
“It’s security to the crew, to the ship itself, and also insurance policies. Premiums are now going sky-high if they can get insurance at all, so it’s going to have serious implications on stock levels, on costs and the whole dynamics of supply chains.”
The acceleration of de-globalization is leading to a surge of uncertainty along major global maritime routes and transport expenses.
Original source: https://t.me/DissidentThoughts/2825