International Shipment Updates

01-29-2024

As a leading provider of multiple transportation modes and the R&R Family of Companies we wanted to keep our customers up to date on situations regarding international shipping. We hope this information from the Shipping Gazette and one of our partners will help guide our customers in making the best logistics decisions for their business.

CHINA AND RUSSIA GIVEN FREE PASS THROUGH RED SEA BLOCKADE 

RUSSIA, but more importantly China, is getting a free pass from Yememi Houthi rocket attacks while passing through the Red Sea and the Suez Canal to European markets, reports Fort Lauderdale's Maritime Executive. "Our goal is to raise the economic costs for [Israel]," Houthi spokesman Muhammad al-Buheiti told Izvestia last week. "As for all other countries, including Russia and China, their shipping in the region is not threatened." Chinese shipping interests appear to be aware of this exception. Many China- linked ships have been broadcasting "All Chinese" or "Chinese Ship" as their AIS "destination" during transits through the Red Sea. Likewise, some ships with Russian cargoes have been broadcasting some variant of "Vessel No Contact Israel." The proportion of Chinese shipping in Red Sea container traffic has been rising dramatically, according to Lloyd's List, though total container traffic has plummeted. One brand new Chinese carrier even appears to specialize in Red Sea transits. Recently-launched Sea Legend Shipping operates a fleet of seven Panamax boxships that run between China and Turkey, calling at ports in the Gulf of Aden and the Red Sea on the way out and back. It even calls periodically in Yemen (Aden) and serves the Houthi-controlled port of Hodeidah through a transshipment connection. (Lloyd’s List first identified Sea Legend's niche service.) 

MAERSK CEO SEES RED SEA DISRUPTION LASTING MONTHS 

MAERSK CEO Vincent Clerc expected global shipping disruption resulting from attacks on Red Sea vessels will likely persist for several months, reports Reuters. In response to these attacks by Iranian-backed Houthi forces, Maersk and other major shipping lines have directed hundreds of commercial vessels to avoid the Red Sea, opting for the longer route around Africa. "So for us this will mean longer transit times and probably disruptions of the supply chain for a few months at least, hopefully shorter, but it could also be longer because it's so unpredictable how this situation is actually developing," said Mr. Clerc. Freight rates have doubled since early December, while insurance sources say war risk insurance premiums for shipments through the Red Sea are also rising. 

MAERSK OPTS FOR RAIL CROSSING TO BYPASS PANAMA CANAL 

MAERSK plans to eliminate Panama Canal vessel transits on a north-south service between Oceania and the US east coast, citing the ongoing drought that has reduced ship transits and container carrying capacity through the waterway, reports New York's Journal of Commerce. The Copenhagen-based carrier said that its OC1 service linking Australia and New Zealand with the ports of Philadelphia and Charleston will instead use a 50-mile rail service across the Isthmus of Panama to handle cargo between the Atlantic and Pacific. As a result, the OC1 service will be broken into two loops, Maersk said. The Pacific loop will drop off northbound cargo at Balboa for the land bridge service via rail to Manzanillo, where the Atlantic loop will retrieve the cargo and resume waterborne service. The carrier did not say whether the nearly 26-day transit time from New Zealand to Philadelphia would change due to the land bridge. It said that while northbound cargo will not be delayed, southbound cargo may see some delays. 

CARRIERS END ASIA-EUROPE DEALS TILL RED SEA SETTLES 

OCEAN carriers have ended long-term agreements on the Asia-Europe run for the duration of the war risk of Red Sea transit, reports New York's Journal of Commerce. According to Hapag-Lloyd, long-term deals will not be available until the Red Sea situation settles. The decision is driven by the lack of clarity regarding the duration of diversions, uncertainties surrounding equipment availability, and the potential impact of ships arriving outside scheduled windows on port utilization. "All this needs to be factored in to determine a long-term contract rate level, which is not possible at this very moment," said Hapag-Lloyd.