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As a result of ongoing geo-political conflicts, the Red Sea has become a focus centre, with international merchant vessels being targeted as part of escalating attacks. Resulting disruptions in the Supply Chain Industry are expected to slow down global trade and increase costs.
International vessels have been attacked by UAVs over the last few days, amongst them OOCL-operated Number 9, a Panama-flagged ship owned by China's COSCO, the UK-owned bulk carrier, Unity Explorer, a Japan-owned bulk carrier, and a South Korea-owned VLC.
The Red Sea and the Suez Canal are key routes for international ocean freight, facilitating around 30% of the yearly global traffic, and recently seeing increased traffic due to the Panama Canal disruptions.
As a consequence of the unstable geopolitical conditions and the attack threats, war risk surcharges and premiums are becoming more common for shippers transiting through the Red Sea. Alongside increased operational costs, potential delays due to rerouting are expected, posing new challenges to the global supply chain.
We will continue to monitor the situation and work on minimising the impacts for our clients. Should you have any questions on your global supply chain, please contact us here.
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