Red Sea disruptions impact global supply chains

Espoo, January 4th 2024

Dear valuable customer,

Due to shipping lines such as Maersk and Hapag-Lloyd, both have experienced attacks by Houthi rebels and despite the additional security measures taken it is a challenge now to determine when the carriers can resume using the Red Sea. Unfortunately, this will cause potential disruptions for an extended period.

The impact on supply chains is expected due to the redirection of ships away from the Red Sea. Cargo from and to Asia and Oceania are likely to face the most significant impact both on longer transit times as well as on freight cost increase.

Major carriers, such as Maersk, MSC, CMA CGM and OOCL have decided to reroute their vessels via the South of Africa, potentially extending the transit time of your cargo by 2 to 3 weeks.

Anticipating a reduction in available carrier capacity, we see already an increased pressure on ocean freight rates and freight additional charges presented by the carriers, which applying to all cargo, despite of earlier rate agreements.

Like during the Covid 19 pandemic, disruptions in shipping are causing a domino effect on international supply chains. Companies relying on timely deliveries of their shipments, supplies, materials and finished products will most likely need to count on delays, potentially leading to production interruptions and shortages.

It is imperative for us to collaborate and find effective solutions to ensure the safety of maritime routes and minimize the impact on the supply chain of our customers. We understand the potential impact on your supply chain, and rest assured, we will diligently review the situation and keep our valued customers informed of any developments.

Yours sincerely,

Oy Hacklin Logistics Ltd