Take DHL Global Forwarding – how much is the Red Sea fillip to earnings?
Chasing the nickel
Here’s the monthly ocean market update by DHL Global Forwarding…
Suez Canal Blockage
TOPIC OF THE MONTH: The Suez Canal in Egypt has been blocked in both directions since Tuesday, March 23, 2021. One of the world’s largest container ships, the Ever Given, on its way from Asia to Europe, was presumably pushed off course by strong wind at the Southern end of the canal, thereupon became grounded and turned sideways, effectively blocking all vessel traffic in the canal. As of 29th March, the container ship has been freed and moved to the Great Bitter Lake for safety inspection.
Approximately 370 vessels, carrying goods worth some US$ 9bn, were queuing on both sides of the grounded vessels and it will take an estimated 4- 6 days to clear the backlog. First information from carriers shows realistic delays of about 1 to 2 weeks for either canal passage or route changes around the Cape of Good Hope (Africa). Overall heavy disruption to the Asia-Europe schedules in particular, but also on US bound routes via the Suez Canal are to be expected.
Heavy port congestion in Europe has to be expected as of next week leading to infrastructure constraints. As a result the empty equipment situation will further worsen globally as vessels are not rotating timely.
Most carriers have enforced booking stops and a rigid blank sailing program will be introduced in order to get the schedule back under control. Therefore, capacity and allocations are being cut drastically. Rates are expected to climb further.
The full impact of this marine traffic jam will be felt in the coming two months and we expect that it will not be fully sorted out before Q3 this year.
This all happens at a time when the global container shipping industry is already under severe pressure because of port congestions, empty container shortage and a schedule reliability at an all time low. Customers, forwarders and carriers will have to continue to work jointly to overcome this industry challenge initially caused by the pandemic and now aggravated by the Suez Canal incident…
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