Red Sea Updates

Rubymar vessel carrying fertiliser sinks after missile attack

On the 17 February, the crew of the general cargo vessel Rubymar abandoned ship after a missile attack near the Yemen coast, despite recent US naval strikes aimed at reducing Houthi capabilities. The US also intercepted a Houthi-controlled unmanned subsurface vehicle (USV) and conducted a cyber-attack on the Iranian spy ship MV Behshad.

The Behshad, suspected of supplying Houthi militias with intelligence, was successfully taken offline in the cyber-attack. The incident may hinder Houthi intelligence-gathering and reduce missile strikes on passing vessels. The maritime industry has raised concerns about the security situation, with uncertainties surrounding the ownership and origin of the targeted vessel. An open letter from shipping industry associations demands the release of 25 seafarers held captive by the Houthis since the capture of the ro-ro vessel Galaxy Leader in November, emphasising the ongoing threats faced by the merchant shipping community.  

The UK-registered Rubymar cargo vessel has completely sunk - the first vessel to be fully destroyed by the Houthis. The vessel was carrying 22,000 tonnes of fertiliser that is believed to be volatile presenting an environmental risk, while the vessel itself poses an impact risk.

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Shipping routes stabilise amidst Red Sea crisis and rerouting challenges

While schedules initially faced disruptions due to diversions around the Cape of Good Hope, networks are starting to stabilise. There was a lull in ports, and ships are arriving, but longer transit times are expected.

More stability is expected in schedules and arrivals moving forward, even though the transit times for goods may be extended. Over time, we expect these changes to settle in, returning to the familiar patterns shippers are accustomed to.The challenge may arise when the Suez Canal reopens, causing a simultaneous arrival of vessels from different routes.

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Evergreen chairman forecasts short-term Red Sea crisis impact on shipping

Evergreen chairman Chang Yen-yi anticipates that the Red Sea crisis will likely persist until Q3 2024. While acknowledging a boost in container freight earnings, he emphasises that this crisis is short-term, unlike the pandemic-driven freight rate increases.

Chang warns that the shipping industry's main challenge is overcapacity, and once the situation normalises, freight rates may not be sustained. He notes the possibility of operators adjusting rates and blanking sailings in response.

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Ocean Import Updates

Ocean carriers hit pause on container sales amid Red Sea impact

To accommodate additional chartered ships during the Red Sea crisis, ocean carriers have temporarily halted container sales and delayed returning equipment to lessors. While carriers have managed equipment supply efficiently in most areas, certain regions like India still face tight supply.

Carriers aim to avoid commercial setbacks due to equipment shortages as markets adjust to the new norm of transits around the Cape of Good Hope. Despite a global surplus estimated at 5 million TEU, the container fleet is expected to contract, with carriers retiring aging boxes.

Container leasing rates, especially from Chinese ports to the US, have surged over 200% since November, primarily due to disruptions caused by Red Sea rerouting.

Major container leasing firms, like Textainer, are experiencing increased demand for equipment amid the crisis. Textainer reported a solid full-year and Q4 result, with fleet utilisation reaching 99.3% at the end of the fourth quarter.

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North Europe container ports manage surge in delayed Asian ship arrivals

Container hub ports in North Europe, including Rotterdam, Hamburg, and Southampton, are handling well the arrival of delayed ships rerouted around the African coast. Despite severe weather conditions in the North Sea and truck disruptions near Benelux ports and Hamburg due to farmer protests, concerns of port and landside congestion are unfounded.

Hapag-Lloyd reports increased yard utilisation and empty-container stacks with around 60%-65% utilisation, alleviating concerns of an equipment crunch. The outlook is optimistic, with a strong trend expected to reduce yard utilisation to manageable levels post the pre-Chinese New Year export surge.

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Red Sea crisis hits Indian ‍agri exports: soaring rates and supply woes

The Red Sea crisis has severely impacted Indian agricultural exporters, disrupted the supply chain and prompted leading trading houses to halt export movements. Containerised grains, oil seeds, pulses, rice, sugar, and vegetable oil are major exports, mainly to Africa.

Soaring ocean rates and equipment availability issues have made agri trades commercially unviable, leading to a 'wait and watch' approach. Mumbai-based traders cite skyrocketing ocean freight rates, surcharges, and challenges in securing export-worthy containers and vessel space. Current average rates from India to East Africa have surged compared to pre-disruption levels, impacting profit margins.

Concerns arise about a potential shift of buyers to alternative sourcing markets if the crisis persists, posing economic and global market impacts. The trend reflects a sharp drop in agri exports reported by industry authorities, emphasizing the alarming situation.

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Air Freight Updates

India opens skies for foreign cargo airlines in major policy shift

India has relaxed its aviation policy, allowing foreign cargo airlines to operate from all its international airports for the next three years. Previously restricted to six major airports, this move is seen as beneficial for perishable trade, enabling producers to reach new global markets and avoid disruptions in ocean supply chains.

Stakeholders in the air cargo industry welcome the change, emphasising the potential for non-metro airports to gain from the robust cargo infrastructure. The policy aligns with India's goal of achieving 10 million tonnes of air cargo trade by 2030. The move is anticipated to enhance air freight connectivity, ease congestion at major hub airports, and drive growth for both domestic and foreign carriers.

However, challenges such as congestion at Delhi Air Cargo complex persist, affecting the competitiveness of Indian apparel exports. The e-commerce boom in India has further fuelled the demand for express cargo services, prompting investments in technology and infrastructure. Both New Delhi Airport and the government are investing in expanding infrastructure and airport networks to accommodate growing demand.

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Air cargo faces congestion and high volumes

Some airports handling sea-air traffic are experiencing severe air cargo congestion, leading to localised suspensions by companies like dnata in Dubai and BFS in Bangkok. Emirates SkyCargo claims its Dubai operations are unaffected, and industry data suggests these issues are not widespread. While traditional sea-air hubs report massive congestion, sources in Colombo deny any serious issues.

Short-term rates have surged in recent weeks, with a 30% increase, driven by the last rush ahead of the lunar new year and the Red Sea crisis. Vietnam to Europe is the only sustained rate surge, spiking 62% in one week. The Red Sea crisis and Chinese New Year have prompted a rush for air freight capacity. Despite increased demand, industry experts believe the heightened situation will likely be short-lived, with airfreight volumes not expected to cause significant disruption.

Customs Updates

Unsworth Ireland is officially open for business

Unsworth Ireland are the experts at delivering tailored solutions that meet the unique needs of our client. As your customs clearance agents, we're dedicated to making the complex simple and ensuring that your goods continue to flow freely and cost-effectively between GB, NI and the Republic of Ireland. Let us focus on removing the complexities of customs clearance, while you focus on building your business.  

Working with Unsworth, you will be able to simplify your Supply Chain by collaborating with a partner that has a significant presence and expertise on both sides of the Irish Sea. Work with a single party to take care of your imports, exports and transportation and rest assured that your customers will receive their goods exactly as you promised.  

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No two logistics challenges are the same. We understand this and tailor our solutions to meet your specific needs. Our teams work closely with you to develop strategies that address your unique challenges effectively and efficiently.

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