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Red Sea: Increasing Diversions and Costs

Recent reports indicate that half of the containership fleet transiting the Red Sea and Suez Canal is now opting for alternative routes due to heightened security concerns in the Red Sea. Within just a week, the number of vessels diverting has doubled, accounting for approximately 18% of the global shipping capacity. This diversion trend is leading to longer and more expensive journeys around Africa, with a record-high 125 ships choosing the route via the Cape of Good Hope, surpassing the numbers observed during the Ever Given grounding incident in March 2021.

In response to these challenges, major carriers like Hapag Lloyd, Zim, and CMA CGM are implementing Emergency Peak Season Surcharges (PSSs). This proactive measure aims to address disruptions in global supply chains caused by the increased diversions and ensure the continuity of essential services.

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