The repercussions of the Red Sea crisis have been longer-lasting and more severe than many shippers thought. Shippers expected delays proportional to the extra sailing time. They may have expected proportional cost increases as well.
But they did not count on such factors as the extreme congestion in Singapore and in other ports. And in ports that have become pivotal, there are looming shortages of equipment such as chassis.
It looks like the disruptions will be with us awhile.
Trade besides containers is also in an upheaval. Sam Chambers’s recent Splash story points out that there is landside competition for capesize ocean shipments of coal.
Mongolia has always had big coal deposits, but moving the coal to international users was a problem. But new rail lines are making the country a viable source for China. China is also importing more from Russia. This chart from Drewry’s shows how the mix of countries China imports from has changed over the past few years.
The impact on shipping is that there will be less demand for capesize bulkers to import from Australia and Indonesia.
This is one more piece of evidence that global trade is radically changing. It will affect both shipowners and shippers in ways that are hard to foresee. Hold on to your hat!
By Charlotte Goldstone 29/07/2024
Red Sea ripples spread across container trades
Sam Chambers July 30, 2024
Supply Chain and Logistics 