Major Global Carriers Diverting Services Away from the Red Sea and the Suez Canal Will Result In Increased Rates and Slower Services

Dear Valued Customer, 


Continued attacks by Yemen based Houthi rebels on shipping vessels in the Red Sea have forced Maersk, MSC, CMA-CGM, Hapag-Lloyd, Cosco, Yang Ming, and other carriers to divert all their services away from the Red Sea and the Suez Canal.


Additionally, the Panama Canal authority continues to impose severe weight restrictions on vessels seeking passage through the canal due to the severe drought that continues to persist in that region. These restrictions already forced carriers to divert Panama Canal traffic through the Suez Canal.


Now all container traffic from Asia to the U.S. East Coast, Europe, and Mediterranean destinations, which were normally routed through both the Suez and Panama Canals, will now be routed around the Cape of Good Hope.


This action will have profound negative effects on the supply chain. It is expected that these route changes will add significant time to each vessel’s trip, increase vessel capacity by at least 20-percent, produce higher rates, and significantly reduce equipment availability.


We recommend reaching out to your advisor as soon as possible to make all necessary adjustments to your supply chain plans. In the meantime, please feel free to reach out to us with any questions or concerns you may have about this situation.


Thank you!


Sincerely yours, 


OEC Group





The information contained herein is provided as a public service with the understanding that OEC Group makes no warranties, either expressed or implied, concerning the accuracy, completeness, reliability, and suitability of the information. Nor does OEC Group warrant that the use of this information is free of any claims of copyright infringement.



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