Red Sea Attacks: What’s Happening?
Due to the current attacks on ships crossing the Red Sea, ships have been forced to divert from the Suez Canal to the Cape of Good Hope route to avoid being targeted. Due to apparent indiscriminate targeting of vessels, the Bab Al-Mandab straight has been deemed unsafe to pass.
What Impact is this Having on Procurement?
This has caused disruption to containerships, affecting up to 29.3% of the global fleet. Overall transit times could be increased by up to 30% with the diversion to the Cape route, with higher impact if vessel speeds are not increased to minimise delays. Transit times could be delayed by 7-14 days, with capacity reduced by up to 20%. Alongside the Chinese New Year rush, this lesser capacity combined with increased fuel consumption will likely lead to increased freight rates. Air freight costs are also rising due to the increase in demand to move away from sea freight.
Measures are being put in place to minimise supply chain disruption, such as increased vessel speeds to account for increased travel distance. Additionally, the Panama Canal increasing its daily transits to 24 from 20 from the 16th of January onwards to account for reduced capacity on alternate routes.
What are PWS doing to Reduce the Impact on Customers?
PWS are aware of the potential implications the above may have on our supply chain and stock levels and we are planning ahead to avoid any disruptions. We will ensure to keep monitoring developments and inform our customers of any complications that may arise and how we will minimise the impact as far as possible.
If you have any questions or concerns regarding the above, please don’t hesitate to get in touch.
This article will be updated as we receive additional information regarding potential disruption to service.
