Prepare for cost hikes; Order ahead
Ship traffic continues to be diverted away from the Suez Canal
as geopolitical tension continues to disrupt Red Sea activity,
bringing into focus long-term impact of a tense event initially
expected to last a short time. With the Suez Canal in turmoil, the
Cape of Good Hope remains a viable alternative.
This trend has boosted voyage length and resulted in higher
vessel utilization and rates as a trip transiting around the Cape
of Good Hope is a longer alternative for many compared to
transiting through the Suez Canal. This improved profitability for
carriers (providers of service) in the first quarter, but shippers
(owners of cargo) should expect choppy seas over the next six
months.
