In the last half month, the route to the Cape of Good Hope in South Africa has been extremely busy. The Red Sea, which was originally the "throat" of international shipping, has become the place where the world's major shipping companies try to avoid - on December 26, the two explosions in the Red Sea area are the further fermentation of the unrest in this half month. More than 100 container ships are being diverted around the Cape of Good Hope amid fears of attacks by Houthi rebels in Yemen, adding significant time and transport costs to trade between Asia and Europe. The traditional waterway may become a "high-risk route", how do Zhejiang foreign trade and transport enterprises feel? How do you get through this? The Red Sea is connected to the Suez Canal, the main shipping route for China and Asian countries to Europe, between northeast Africa and the Arabian Peninsula.The Red Sea is a narrow stretch of water between northeast Africa and the Arabian Peninsula, and the Suez Canal is a waterway connecting the Red Sea and the Mediterranean Sea. This is the busiest and most trafficked international canal on Earth. In mid-December, due to a number of ships to the Red Sea waters were attacked by Yemeni Houthi armed forces, since December 15, Mediterranean shipping, Maersk, CMA CGM shipping, COSCO Shipping, Hapalot and other top ten container shipping companies in the world have suspended shipping in the Red Sea. According to Alphaliner, a shipping consultancy, the 10 shipping lines that have suspended Red Sea traffic operate about 85% of the world's container capacity, and more than 95% of the capacity on Asia-Europe routes. This means that the cargo will be diverted through the Cape of Good Hope, which greatly increases the sailing time from the Far East to Northwest Europe and reduces the ship turnover efficiency by about 19%. The large-scale detour of container ships has also led to a reduction in the effective global container capacity of 1.45 million to 1.7 million TEUs, which has brought great challenges to the stability of the Asia-Europe supply chain.
The crisis in the Red Sea is a ripple from two sets of geopolitical issues in the Middle East, the civil war in Yemen and the Israeli-Palestinian conflict. Since October, the Houthi group has launched attacks on commercial vessels sailing in the Red Sea. Although Maersk, the world's second largest container company, said on December 25 that it was preparing to resume shipping in the Red Sea, the industry is still not optimistic about the short-term recovery of the Red Sea route as the explosion continues to occur. "The Red Sea and Suez Canal bear most of China's maritime imports and exports, but also Ningbo and Europe, the Middle East, North Africa and other places through the route, the impact on Zhejiang's foreign trade is greater." Xiao Liang, director of the modern business Research Center of Zhejiang Technology and Commerce University, told reporters that in the short term, the export profits of Zhejiang foreign trade enterprises have been affected, for foreign trade enterprises that do not bear the freight will face the price reduction requirements of affected customers, and for foreign trade enterprises that bear the freight, the cost has risen sharply.
"If the Red Sea outage event continues to ferment, affected by the shortage of shipping capacity brought by large areas of outage, and the extension of logistics time brought by detour, Zhejiang's foreign trade export supply chain resilience is facing great challenges, there may be a series of chain reactions such as delivery cycle lag, inventory overhang, demand contraction, and affect the recovery and growth of foreign trade exports." In Xiao Liang's view, the factors behind the Red Sea shutdown incident are extremely complex, its duration is affected by the Palestinian-Israeli conflict and other wars and political factors, great uncertainty, difficult to predict, but because of the importance of Red Sea shipping in the global shipping and trading system, especially the affected EU, the United States, and even China and other external forces will be the first time to intervene in coordination, It is expected that this will not last for a long time, but it is highly likely that regional conflicts will cause a recurrence.
How much the cost of foreign trade has been affected not only by Zhejiang merchants who do foreign trade business with Europe, but also the logistics and freight forwarding enterprises that send goods to the East coast ports of the United States are also bearing the increase in freight and time costs. Cheng Keyuan, head of Zhejiang Ying International Logistics Co., LTD., said. Ningbo Shipping Exchange industry analyst Qian Hanglu has done statistics, compared with the original Red Sea-Suez Canal route, detour of the Cape of Good Hope will lead to East Asia to Northwest Europe, East Asia to the Mediterranean Sea voyage time increased by 26% and 51%. "This will result in an average shipping cost of about $500 more per container than before, and some of this will have to be borne by shippers." Ningbo Shipping Exchange provided data to reporters, on December 22, the freight rate of Ningbo Zhoushan Port to Europe was 1128 US dollars/TEU, up 11.8% week on week and 62.1% higher than four weeks ago; The freight rate of Zhoushan Port to East of Ningbo was 2,171 US dollars/TEU, up 18.2% week on week and 53.2% higher than four weeks ago; The freight rate of the Zhoushan Port to the west of Ningbo was $1,838 / TEU, up 9.6% week on week and 37.9% from four weeks ago. The most affected are European cross-border e-commerce sellers, for whom the time cost is the biggest cost.
"If the goods do not catch up with the New Year and other major promotion nodes, or do not make up the stock within the time stipulated by the platform, the most direct consequence is to reduce the order when the traffic is the largest, and more seriously, after the search recommendation position of the platform is moved, the impact is the next year's business." European Amazon e-commerce seller Hu Bo told reporters. Logistics companies lost business that had been shipped before the Red Sea route was suspended. "The first one to be affected is the one departing on December 5, which was originally expected to arrive on December 26, but now it will be postponed to January 13 next year." The person in charge of Yiwu Huaga Trading Co., Ltd. told reporters. "We need to take on the business that has been taken over from the customer and is ready to ship, because it has been delivered and this part needs to be taken on by us." For new orders, we will calculate the unit price according to the new cost, and the seller will adjust the product price appropriately to absorb the additional cost, which will ultimately be borne by the buyer." Cheng Keyuan said. The unexpected outage has brought instability to the market. Shipping industry insiders told reporters that the current market "snatch shipping space" phenomenon has emerged, and even spawned a scalper business for snatch shipping space, a small number of shipping companies to provide "diamond cabin" services, the price is two or three times higher than the market. "These costs will also be reflected in the price of the goods." Mr. Hubo said he was already planning to raise the price of each set of hardware hinges in his store by 0.5 euros for 36 euros.
