Red Sea operations: Update 23 February
Since the outbreak of the attacks on commercial vessels in the Gulf of Aden and the Southern Red Sea in November 2023, the overall situation remains largely unchanged. However, the global ocean shipping scenario seems to have stabilised with existing overcapacity absorbing the additional space required.
Despite a US-led military operation in the Red Sea, the Houthi rebel attacks on commercial vessels continue. As a result, the Suez Canal is still not a viable trade route, and almost all shipping lines are going via Cape of Good Hope. Only some Chinese carriers are still routing through the Red Sea.
The additional 7–14-day journey south of Africa has increased the global demand for sea freight capacity. However, the existing structural overcapacity in the market has helped to cater for the extra spare required. This means that, while the extended transit times will stay, the rotation of vessels is stabilising and, for the time being, the previously predicted increase of port congestion has not materialised.
Sea freight rates jumped at the start of the year, also driven by the Chinese New Year, but over the recent weeks rates have started to flatten. It is not expected that rates will return to pre-crisis levels anytime soon, however it is also not expected that carriers will be able to uphold current rate levels.
Three months into the crisis, a solution does not seem to be within reach anytime soon. As long as the Houthi rebels continue to attack and threaten cargo ships in the Red Sea and Gulf of Aden, we do not expect that carriers will resume routings via the Suez Canal.
At DSV, we remain in close contact with our carriers in order to handle the situation in the best possible way and minimise the impact on your business. We will continue to monitor developments and will keep you updated if the situation changes.
We appreciate your understanding under these critical circumstances. Should you need detailed information about routing schedules, etc., please reach out to your local DSV representative.