The Red Sea Crisis: ramifications for vessel operations, shipping networks, and maritime supply chains

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The Houthi initially claimed they were only targeting merchant vessels traveling to or from Israel or of Israeli ownership, but it soon became evident that also ships of countries supportive of Israeli actions in Gaza were being attacked.

“While the Houthi initially claimed they were only targeting merchant vessels traveling to or from Israel or of Israeli ownership, it soon became evident that also ships of countries supportive of Israeli actions in Gaza were being attacked.”

Probably not a substantial claim: may not pass S4 (based).

From mid-November 2023, the Houthi militia started to focus more on attacking merchant vessels.

“From mid-November 2023, the Houthi militia started to focus more on attacking merchant vessels.”

May combine two claims.

The vast majority of large container carriers have suspended Red Sea operations, while the fleets of a number of smaller niche and regional operators continue to use the Red Sea.

“Irrespective of the additional costs and time involved, however, the vast majority of large container carriers have suspended Red Sea operations, while the fleets of a number of smaller niche and regional operators continue to use the Red Sea.”

May combine two claims.

The Red Sea crisis affects approximately 30% of global container trade with 70 to 80% of vessels having been rerouted.

“In late December 2023, Goldman Sachs already reported that the Red Sea crisis affects approximately 30% of global container trade with 70 to 80% of vessels having been rerouted”

• cites Goldman SachsNot matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

Between mid-November and mid-February, some 40 Houthi attacks were carried out on vessels transiting the southern Red Sea and the Gulf of Aden.

“Between mid-November and mid-February, some 40 Houthi attacks have been carried out on vessels transiting the southern Red Sea and the Gulf of Aden.”

May combine two claims.

The diversion around the Cape causes total sailing distance to increase by 29%, while total round voyage time goes up by 17%.

“The diversion around the Cape causes total sailing distance to increase by 29%, while total round voyage time goes up by 17%.”

May combine two claims.

The attacks carried out by the Houthi militia have clearly and dramatically reduced trade through the Suez Canal, as shipping lines have opted to reroute their vessels on the significantly longer voyage around the Cape of Good Hope.

“The attacks carried out by the Houthi militia have clearly and dramatically reduced trade through the Suez Canal, as shipping lines have opted to reroute their vessels on the significantly longer voyage around the Cape of Good Hope.”

May combine two claims.

A lot of new capacity is scheduled to enter the market in 2024: 478 vessels totalling approximately 3.1 million TEU, beating the previous record of 2023 by 41%.

“At the same time, as a direct result of the vessel ordering spree of 2021 and early 2022, a lot of new capacity is scheduled to enter the market in 2024: 478 vessels totalling approximately 3.1 million TEU, beating the previous record of 2023 by 41%.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). The quote only partly states this claim.

The Red Sea crisis has already resulted in a revamping of sourcing, supply chain configurations, and production schedules.

“(c) Supply chain redesign a revamping of sourcing, supply chain configurations, and production schedules.”

May combine two claims.

Shippers are confronted with much higher floating inventories and delayed deliveries, i.e., with higher unreliability that strikes at the heart of efficient global logistics.

“The latter are confronted with much higher floating inventories and delayed deliveries, i.e., with higher unreliability that strikes at the heart of efficient global logistics.”

Probably not a substantial claim: may not pass S3 (load-bearing).

On December 20, 2023, CMA CGM introduced a 'Red Sea Charge' of USD 2700 per FEU for all cargo shipped to or from Red Sea ports.

“On December 20, 2023, CMA CGM introduced a 'Red Sea Charge' of USD 2700 per FEU for all cargo shipped to or from Red Sea ports.”

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

Shippers try to adapt to a new Cape route reality by diversifying their supply chains and looking at alternative routes and transport modes.

“Shippers try to adapt to a new Cape route reality by diversifying their supply chains and looking at alternative routes and transport modes.”

May combine two claims.

There has been an upward surge in demand (and freight rates therefore) for air cargo transport of high-value shipments from Asia to Europe, particularly from the Middle East to both Europe and the US.

“There has also been an upward surge in demand (and freight rates therefore) for air cargo transport of high-value shipments from Asia to Europe, particularly from the Middle East to both Europe and the US.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

The fruit and vegetable business is another sector impacted by the longer transit times.

“The fruit and vegetable business is another sector impacted by the longer transit times.”

Probably not a substantial claim: may not pass S3 (load-bearing).

To relieve some of the pressure, the production of new boxes (mainly in China) has grown since late December 2023.

“To relieve some of the pressure, the production of new boxes (mainly in China) has grown since late December 2023.”

May combine two claims.

The SCFI for North Europe increased from 707 USD/TEU in mid-November to 3103 USD/TEU in W3 January 2024 (+339%), followed by a small decrease to 2723 USD/TEU in W6 2024.

“The Shanghai Containerized Freight Index (SCFI) for North Europe increased from 707 USD/TEU in mid-November to 3103 USD/TEU in the third week (W3) of January 2024 (+ 339%), followed by a small decrease to reach 2723 USD/TEU in W6 2024.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

Transit times on the most northern rail corridor connecting China via Kazakhstan and Russia to Poland and Western Europe typically range between 15 and 25 days, with freight rates ranging from 7000 to 15,000 euro per container.

“Transit times on the most northern rail corridor connecting China via Kazakhstan and Russia to Poland and Western Europe typically range between 15 and 25 days, with freight rates ranging from 7000 to 15,000 euro per container.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Maersk applies a 'Transit Disruption Surcharge' of USD 400 per FEU for cargo on vessels affected by the disruptions, for bookings between December 21, 2023, and January 28, 2024.

“Maersk applies a 'Transit Disruption Surcharge' for cargo on vessels affected by the disruptions.The surcharge amounts to USD 400 per FEU and applies to bookings between December 21, 2023, and January 28, 2024.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

Rate impacts can also be found in other trade routes, mainly in the Trans-Pacific (SCFI of 3974 USD/TEU in mid-January 2024) and the China-East Coast North America (ECNA) routes (5813 USD/TEU).

“Rate impacts can also be found in other trade routes, mainly in the Trans-Pacific (SCFI of 3974 USD/TEU in mid-January 2024) and the China-East Coast North America (ECNA) routes (5813 USD/TEU).”

May combine two claims.

CMA CGM implemented a 'contingency charge' of USD 1000 per FEU on the westbound Asia-Med route and USD 525 per FEU for eastbound Europe-Asia shipments.

“The carrier also implemented a 'contingency charge' of USD 1000 per FEU on the westbound Asia-Med route and USD 525 per FEU for eastbound Europe-Asia shipments.”

Probably not a substantial claim: may not pass S3 (load-bearing).

In early January 2024, MSC introduced a 'contingency adjustment charge' of USD 500 per TEU and USD 1000 per FEU on the Europe-Asia and Europe-Middle East routes.

“In early January 2024, MSC introduced a 'contingency adjustment charge' of USD 500 per TEU and USD 1000 per FEU on the Europe-Asia and Europe-Middle East routes.”

May combine two claims.

For a typical Asia-North Europe weekly liner service, the increase in emissions at sea associated with Cape rerouting can be estimated at 42% for an individual vessel and 67% for the fleet needed to operate a weekly service on this trade route.

“For a typical Asia-North Europe weekly liner service, the increase in emissions at sea associated with Cape rerouting can be estimated at 42% for an individual vessel and 67% for the fleet needed to operate a weekly service on this trade route (see Table 2 for further details).”

Probably not a substantial claim: may not pass S3 (load-bearing).

There is a visible interest in combined air and sea transport.

“Next to a growing interest in Eurasian rail services, there is also a visible interest in combined air and sea transport.”

May combine two claims.

The SCFI for the Med recorded a 252% increase in the same period, to reach 4037 USD/TEU in W3 2024, followed by a modest drop to 3753 USD/TEU in week 6.

“The SCFI for the Med recorded a 252% increase in the same period, to reach 4037 USD/TEU in W3 2024 (Fig. 3), followed by a modest drop to 3753 USD/TEU in week 6.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). The quote only partly states this claim.

The Red Sea crisis has already resulted in greater use of modal alternatives, primarily of rail (particularly Eurasian and US land-bridges).

“(b) Using modal alternatives greater use of modal alternatives, primarily of rail (particularly Eurasian and US land-bridges);”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

Carriers started to reschedule their services in late January 2024, and the peak effect before the Chinese New Year has already been discounted.

“Carriers started to reschedule their services in late January 2024, and the peak effect before the Chinese New Year has already been discounted.”

May combine two claims.

The crisis is generating a heightened interest in Eurasian overland rail services, which are faster but more expensive than seaborne transport.

“The crisis is generating a heightened interest in Eurasian overland rail services, which are faster but more expensive than seaborne transport.”

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

Shippers are anxious to secure vessel and box capacity from freight forwarders and carriers, and this comes at a price.

“In such a situation, shippers are anxious to secure vessel and box capacity from freight forwarders and carriers, and this comes at a price.”

Probably not a substantial claim: may not pass S3 (load-bearing).

As the service disruptions impact the flow of empty equipment, a number of carriers have implemented empty equipment imbalance surcharges.

“As the service disruptions impact the flow of empty equipment, a number of carriers have also implemented empty equipment imbalance surcharges.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

The sudden switch to the Cape route in the early weeks of the Red Sea crisis was most impactful.

“The sudden switch to the Cape route in the early weeks of the Red Sea crisis was most impactful.”

Probably not a substantial claim: may not pass S3 (load-bearing).

In late January 2024, 2M partners Maersk and MSC announced that they have reset their schedules for container services between Asia and the USEC through the end of March with diversion via the Cape route.

“For example, in late January 2024, 2M partners Maersk and MSC announced that they have reset their schedules for container services between Asia and the USEC through the end of March with diversion via the Cape route.”

May combine two claims.

The Suez Canal route is normally used by nearly one-third of global container traffic and around 12-15% of global goods trade.

“The Suez Canal route is normally used by nearly one-third of global container traffic and around 12-15% of global goods trade (UNCTAD 2024).”

• cites UNCTAD 2024Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

About 1500 merchant vessels per month would normally transit the Suez Canal before the start of the Red Sea crisis in mid-November.

“Data from Lloyd's Intelligence show that about 1500 merchant vessels per month would normally transit the Suez Canal before the start of the Red Sea crisis in mid-November.”

• cites Lloyd's IntelligenceNot matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

The sudden changes in fleet deployment will inevitably result in short-term capacity constraints, with a shortage of slot space for shippers likely to occur in the period immediately before the Chinese New Year.

“On the negative side, though, the sudden changes in fleet deployment will inevitably result in short-term capacity constraints, with a shortage of slot space for shippers likely to occur in the period immediately before the Chinese New Year (CNY).”

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The Houthi militia has the support of Iran and troops allegiant to former President Ali Abdullah Saleh.

“While the former is primarily backed by Saudi Arabia and an international coalition, the latter has the support of both Iran and troops allegiant to the former President Ali Abdullah Saleh (Guzansky and Eran 2018).”

• cites Guzansky and Eran 2018Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

An annual average of 8.8 million barrels of oil shipments pass through the Bab al-Mandab strait each day, representing 8.7% of global demand of 101.7 million barrels per day in December 2023.

“According to the US Energy Information Administration (2023), an annual average of 8.8 million barrels of oil shipments pass through the Bab al-Mandab strait each day, representing 8.7% of the global demand of 101.7 million barrels per day in December 2023 (International Energy Agency 2023).”

• cites US Energy Information Administration 2023Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites International Energy Agency 2023Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The Bab al-Mandab Strait has a width of less than 30 km and is divided into two channels by Perim Island.

“The Strait has a width of something less than 30 km and it is divided into two channels by Perim Island (Al-Yadomi 1991).”

• cites Al-Yadomi 1991Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S1 (asserted), S2 (checkable), S3 (load-bearing).

The current crisis is far more manageable compared to what supply chains had to endure during the COVID-19 disruptions.

“Still, there is the general feeling that the current crisis is far more manageable compared to what supply chains had to endure during the COVID-19 disruptions.”

Probably not a substantial claim: may not pass S3 (load-bearing).

As a result of the accelerating melting of Arctic ice, NSR could claim an increasing share of the Suez traffic, in the bilateral trade between China and the European Union which approaches rapidly 1 trillion USD.

“The route is 40% shorter compared to Suez and, as a result of the accelerating melting of Arctic ice, NSR could claim an increasing share of the Suez traffic, in the bilateral trade between China and the European Union which approaches rapidly 1 trillion USD (Lee and Kim 2015;Solvang et al. 2018;Tseng and Cullinane 2018;Theocharis et al. 2019;Xu et al. 2011).”

• cites Lee and Kim 2015 sourceNot checked — no full text of the source
• cites Solvang et al. 2018 sourceNot checked — no full text of the source
• cites Tseng and Cullinane 2018 sourceNot checked — no full text of the source

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

Irrespective of the current crisis, the NSR has been studied for years and major companies such as Cosco and Maersk have experimented with its use.

“Irrespective of the current crisis, the NSR has been studied for years and major companies such as Cosco and Maersk have experimented with its use.”

May combine two claims.

The higher freight rates are a combined result of capacity being absorbed by the longer Cape route, the additional fuel costs involved in this route due to the longer distance, and the negative shipper expectations about the availability of capacity going forward.

“The higher freight rates are a combined result of capacity being absorbed by the longer Cape route, which reduces available slots per unit of time, by the additional fuel costs involved in this route due to the longer distance, and by the negative shipper expectations about the (un)availability of capacity going forward.”

May combine two claims.

Circumnavigating Africa has been the sole alternative in the Asia-Europe trades during the Arab-Israeli wars and whenever there was intensification of piracy activities in the Red Sea, high bunker prices and need for slow steaming, exorbitant hikes in Suez Canal tolls, etc.

“As a matter of fact, circumnavigating Africa has been the sole alternative in the Asia-Europe trades during the Arab-Israeli wars (the Suez Crisis of 1956; the Six-Day war of 1967 and the Yom Kippur war of 1973), and whenever there was intensification of piracy activities in the Red Sea, high bunker prices and need for slow steaming, exorbitant hikes in Suez Canal tolls, etc. (Notteboom and Rodrig”

• cites Notteboom and Rodrigue 2011a, bNot matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites Notteboom 2012 sourceNot checked — no full text of the source

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing). May combine two claims.

In a 'VUCA' world, turbulence in shipping markets is likely to persist, requiring resilience and proactive planning to withstand additional shocks.

“In a 'VUCA' world (Volatile, Uncertain, Complex, and Ambiguous; Bennet and Lemoine 2014), turbulence in shipping markets is likely to persist, requiring resilience and proactive planning to withstand additional shocks.”

• cites Bennet and Lemoine 2014Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

In theory, the NSR can serve as an all-water alternative to the Suez route, particularly to connect East Asia to Northern Europe.

“In theory, the NSR can serve as an all-water alternative to the Suez route, particularly to connect East Asia to Northern Europe.”

May combine two claims.

Eurasian rail services primarily constitute a niche option for high-value cargo in limited quantities, so their overall share in Asia-Europe trade is expected to remain rather modest.

“The Eurasian rail services primarily constitute a niche option for high-value cargo in limited quantities, so their overall share in Asia-Europe trade is expected to remain rather modest.”

Probably not a substantial claim: may not pass S3 (load-bearing).

By including air transport in the supply chain, a part of the delays and uncertainties can be avoided.

“By including air transport in the supply chain, a part of the delays and uncertainties can be avoided.”

May combine two claims.

In the fiscal year 2022-2023, Suez Canal tolls reached a record USD 9.4 billion, representing 2% of Egypt's GDP.

“In the fiscal year 2022-2023, tolls had reached a record USD 9.4 billion (Reuters 2023), representing 2% of the country's GDP.”

• cites Reuters 2023Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The Cape Route does not serve only Europe, but ships, on their way there, or to the Americas, can tranship at South African ports, thus also serving both East and West Africa.

“Incidentally, the Cape Route does not serve only Europe, but ships, on their way there, or to the Americas, can tranship at South African ports, thus also serving both East and West Africa (see Fig. 1).”

May combine two claims.

Extant studies on NSR show that the economic feasibility of developing container shipping along this route is very low and a number of major container carriers have even pledged not to develop the NSR option for environmental reasons.

“However, extant studies on NSR show that the economic feasibility of developing container shipping along this route is very low and a number of major container carriers have even pledged not to develop the NSR option for environmental reasons (Verny and Grigentin 2009;Zhu et al. 2018).”

• cites Verny and Grigentin 2009 sourceNot checked — no full text of the source
• cites Zhu et al. 2018 sourceNot checked — no full text of the source

May combine two claims.

The rerouting around the Cape and the longer sailing distances increase total bunker consumption and ship emissions.

“The rerouting around the Cape and the longer sailing distances, increase total bunker consumption and ship emissions.”

May combine two claims.

This significantly reduced uncertainty about maritime transit times, allowing supply chain planners to implement more robust solutions for streamlining the goods flow.

“This significantly reduced uncertainty about maritime transit times, allowing supply chain planners to implement more robust solutions for streamlining the goods flow.”

Probably not a substantial claim: may not pass S4 (based). May combine two claims.

The Red Sea crisis has already resulted in a fairly speedy rerouting of maritime flows which may well persist into the medium-term, depending on how the Red Sea crisis evolves.

“(a) Rerouting of vessels A fairly speedy rerouting of maritime flows which may well persist into the medium-term, depending on how the Red Sea crisis evolves;”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

If the security situation in the Red Sea does not improve significantly in Q2 2024, this might lead to an increased risk of inflationary pressures, depending on how long the disruption persists and whether other disruptions emerge.

“If the security situation in the Red Sea does not improve significantly in Q2 2024, this might lead to an increased risk of inflationary pressures, depending on how long the disruption persists and whether other disruptions emerge.”

Probably not a substantial claim: may not pass S3 (load-bearing).

The surge in insurance costs has made it much easier for the parties involved to agree on a rerouting via the Cape.

“However, the surge in insurance costs has made it much easier for the parties involved to agree on a rerouting via the Cape.”

• AssumptionRests on an assumption: It is legally difficult to refuse a voyage when insurers are still prepared to insure it.

May combine two claims.

The massive vessel rerouting via the Cape can result in congestion in alternative routes which in its turn will also impact the supply chain.

“The massive vessel rerouting via the Cape can result in congestion in alternative routes which in its turn will also impact the supply chain.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

Two other, perhaps more 'radical,' alternatives to Suez are the Arctic Northern Sea Route (NSR) and the recently announced India-Middle East-Europe Corridor (IMEC).

“Two other, perhaps more 'radical,' alternatives to Suez are the Arctic Northern Sea Route (NSR) and the recently announced India-Middle East-Europe Corridor (IMEC).”

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The IMEC concept involves sea-leg, connecting West India to the UAE: a railway line traversing Saudi Arabia, ending through Jordan to the Israeli ports, to be concluded by a final second maritime link to the southern European ports of Piraeus, Genova, and Marseilles.

“The concept involves sea-leg, connecting West India to the UAE: a railway line traversing Saudi Arabia, ending through Jordan to the Israeli ports, to be concluded by a final second maritime link to the southern European ports of Piraeus, Genova, and Marseilles.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

The USD20 billion IMEC project, which also shortens distances by 40%, was introduced by the leaders of the G20 summit in India (September 2023), as a concept circumventing the Red Sea and as a counterbalance to China's Belt and Road Initiative (BRI).

“The USD20 billion IMEC project, which also shortens distances by 40%, was introduced by the leaders of the G20 summit in India (September 2023), as a concept circumventing the Red Sea and as a counterbalance to China's Belt and Road Initiative (BRI).”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

A much less radical alternative and longer-term routing solution may be offered by cargoes that have up to now been moving from Asia to the US East Coast via Suez and now, during this crisis period, could switch via the Transpacific to the US West Coast ports in order to access US land-bridge rail services.

“As said above, a much less radical alternative and longer-term routing solution may be offered by cargoes that have up to now been moving from Asia to the US East Coast via Suez and now, during this crisis period, could switch via the Transpacific to the US West Coast ports in order to access US land-bridge rail services.”