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Tense Market Situation

We would like to inform you about the still very tense situation in the Red Sea and the Suez Canal and explain the associated challenges for container shipping. Due to ongoing tensions in the Middle East and repeated attacks by Houthi rebels on container ships in the Red Sea, many ships are forced to avoid the Suez Canal and instead take the longer route around the Cape of Good Hope. This change in route now leads to significant space shortages and delays in the supply chain. Avoiding the Suez Canal extends the journey by approximately 4,000 nautical miles and at least 10 days.

Additionally, the rapidly growing shortage of empty containers in Asia is exacerbating the situation. Confirmed bookings can partly not be fulfilled, leading to an increase in cargo backlog at Asian ports. Currently, ships are booked about 4-5 weeks in advance, further complicating planning for companies.

As a result of high demand and limited supply, transport prices in container shipping continue to rise sharply. Estimates suggest that the increasing transport costs could raise global core inflation by up to 0.7 percentage points (source: WEF & JP Morgan).

An agreement with the Houthi rebels is not in sight. The resumption of regular passage through the Suez Canal will therefore continue to be delayed. The charter market is now exhausted, so no additional shipping capacities are available. A normalization of the situation is therefore not foreseeable. Source: SPEDLOGSWISS

We will keep you informed and are available for any questions.

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