The Red Sea region is currently in the grip of a severe crisis, affecting sea routes and disrupting the global shipping and logistics industry. This has not only disrupted the flow of goods but also compelled vessels to seek alternative routes, such as circumnavigating Africa, leading to increased shipping costs and extended delivery times.
Current Status of Ships in the Red Sea
- Wait-and-See Approach: Ships are currently faced with a difficult decision – either wait for the threat to subside before continuing their journey or opt for a longer route around Africa. This decision-making process involves balancing security concerns with potential economic losses.
- Rerouting Challenges: The redirection of vessels is not a straightforward solution, as it significantly impacts operational costs and delivery schedules. Hapag-Lloyd, for instance, plans to divert 25 ships by the year-end due to rising freight rates and shipping stock shortages.
Impact on Shipping Rates
The crisis has triggered a substantial spike in container costs, and with the coming holidays and Chinese New Year, further surcharges and rate adjustments are possible. Various handling charges will apply depending on each carrier, and transportation rates are expected to rise, based on the high demand.
Moreover, cargo insurance is not included in most services, and clients are advised to arrange coverage. Additional costs such as overweight fines, road tax, toll charges, and official fees will also need to be considered.
Overall Impact on Transit Times
The ongoing Red Sea crisis has introduced complexities, leading to variations in transit times, direct routes to Sokhna, Djibouti, Berbera and Port Sudan, routed via Jeddah. Major ports sharing the same route demonstrate consistency, except for Hodeidah, which is subject to approval by the United Nations.
How can Noatum Logistics help you?
Noatum Logistics offers various adapted solutions through synergies with AD Port Group’s carriers such as Alligator Shipping Line, Cordelia, Transmar, GFS and SAFEEN, which have already implemented alternative routes and revised transit times to the current situation. This is crucial as shippers may seek to diversify their transportation methods, balancing air and sea shipments based on urgency and cost considerations.
- Accessible Sea Routes: Ports such as Jeddah (KSA), Djibouti (Djibouti), Berbera (Somaliland), Port Sudan (Sudan), Aden (Yemen), Hodeidah (Yemen), and other unaffected ports in the Middle East/Arabian Gulf remain covered. Additionally, land transport options from Jebel Ali or Khalifa Port serve as seamless connections. The situation is fluid, however, so please connect our team for latest updates.
- Airfreight from UAE: Airfreight solutions for cargo from China or other countries are facilitated through local airports. As sea routes face increased risks, airfreight becomes a crucial alternative for timely and secure cargo delivery. This strategic move ensures that urgent shipments can swiftly depart from said ports offering a reliable solution in the midst of sea route uncertainties.
- Land Transport from Khalifa Port and other ports in the Arabian Gulf (including Jebel Ali): For nearby regional countries including Jordan, Syria, Lebanon, and other parts of KSA, land transport from Jebel Ali or Khalifa Port becomes a more cost-effective option. This can offer a seamless and affordable solution for clients looking to transport goods to neighbouring nations. Our team will handle the customs declaration process and adherence to regulations. Shippers must secure confirmation from the shipping line at the origin for the release of Delivery Orders to Noatum Logistics without Bill of Landing endorsement. A “Transit Out” Customs declaration with a 5% Customs deposit will be processed for shipments to Jordan.
This alternative not only addresses budget constraints but also offers a dependable mode of transportation amidst the high demand predicted for airfreight in the region.
- Rail from China to Europe: Another emerging route gaining traction is rail transport from China to Europe, presenting a viable option for certain shipments. This route offers a sustainable and efficient option, capitalising on the growing demand for diversified transportation methods.
Information to be considered
The new routes implemented by our associated AD Ports Group carriers Alligator Shipping Line, Cordelia, Transmar, GFS and SAFEEN offer diverse transit times based on destination.
Shippers must align their logistics strategies with the urgency of their shipments and the specific challenges posed by the geopolitical landscape. Our commitment to providing value-added services, including cross-docking capabilities and customs facilitation, demonstrates a client-centric approach that transcends the challenges imposed by the current geopolitical landscape.
Staying informed becomes crucial for effective supply chain management in this dynamic and challenging environment. As the world grapples with uncertainties, Noatum Logistics is a trusted partner equipped not only to navigate the crisis but to pioneer transformative solutions that will ease your supply chain.
For any enquiries regarding current and future operations affected by the situation, new routes and alternate solutions, please contact our Middle East team at email@example.com or firstname.lastname@example.org.