They say that the surplus capacity of maritime cargo transport “has been exhausted”

They say that the surplus capacity of maritime cargo transport “has been exhausted”
They say that the surplus capacity of maritime cargo transport “has been exhausted”

By PortalPortuario Editorial Team

@PortalPortuario


Jan Hoffman, Head of Trade Logistics Section at the United Nations Conference on Trade and Development (UNCTAD)assured that the surplus capacity of maritime cargo transport “has been exhausted”, which would be a consequence of the tensions and disruptions caused since the beginning of the conflict in the Mar Rojo.

The above was pointed out by Hoffman in the context of his participation in the podcast “Beyond the Box” of Maerskwhere he pointed out that “in today’s maritime transport, whoever shoots at a ship shoots at the world. The situation continues. Spare capacity has been exhausted and all routes are affected, not only those that pass through the West, unfortunately.”

It has been more than six months since tensions in the Red Sea began and the effects on global shipping and supply chains have intensified. Ships continue to temporarily divert around the Red Sea. Cape of Good Hopewhich significantly increases transit times and operating costs.

Periodic service reconfigurations and volume changes have put pressure on infrastructure, contributing to port congestion, delays, and shortages of capacity and equipment. At the same time, demand for container shipping has remained strong.

Before the attacks began in late 2023, 12% of global trade passed through the Suez CanalRecent figures show the number of ships passing through the canal has plummeted by 66% since shippers began temporarily diverting their vessels to the southern tip of the African continent.

According to Maersk, the situation in the Red Sea has caused multiple challenges, such as the increased transit times due to the circumnavigation of Africa via the Cape of Good Hope, which has increased freight transport distances by an average of 9%. “As a result of these longer routes, more ships are needed to transport the same amount of goods,” the shipping company said.

Another consequence is the rising costsas taking the longer route to avoid the Red Sea and the Suez Canal means higher costs for carriers and companies. “More time, fuel and resources are needed to cover longer routes, and shipping costs have increased,” the entity linked to the group stressed. A.P. Moller-Maersk.

At the same time, a capacity shortagewhich is caused by the number of ships moored on long voyages. “The number of ships available to transport cargo is significantly reduced. It is estimated that available capacity will be reduced by 15% to 20% in the second quarter of 2024,” the Danish company said.

The scenario would also provoke a lack of certaintyas “the current situation has increased uncertainty in global supply chains. Longer transit times and port congestion have significantly affected reliability,” Maersk said.

The effects of the shipping situation in the Red Sea have extended far beyond the region and created significant disruptions to the flow of cargo around the world. Mark Szakonyi, executive editor of the Journal of Commercesaid on the podcast that “I hate to use the perfect storm cliché, but a lot of things have come together to strain the system. I think there is also heightened apprehension about inventories in the coming months. After the pandemic and all the disruption it has caused, there is a sense that there is some anticipatory stockpiling going on.”

Lessons

The situation in the Red Sea and the Suez Canal has highlighted the importance of building resilient supply chains. Maersk said there are several ways companies can do this, including: diversification of supply chainswhich “can be achieved by having multiple material suppliers from different regions. This can help reduce the impact of supply chain disruptions.”

Establishing strong alliancessince “a reliable partner in the supply chain can help plan alternative modes of transport or shipping routes and minimize the impact on a company’s supply chain,” the shipping company explained.

Investing in data and analyticsin the sense that “leveraging technology and data analytics can help businesses better predict and respond to disruptions,” the company added.

“The situation in the Red Sea has created a complex web of challenges for global trade, from longer transit times and capacity constraints to increased costs and uncertainty. No one knows how long it will take for the effects of shipping disruptions in the Red Sea to ease, or how long it might take to return to normal. The challenges have highlighted the need for businesses to develop strategies to improve supply chain resilience and for shippers to assess the potential to better protect themselves from disruptions in the future,” he concluded.


 
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