The Houthis, an Iranian-backed militia group, recently announced their intention to target commercial ships in retaliation for Israel’s actions in Gaza. These mounting attacks on shipping vessels in the Red Sea are disrupting trade through the Suez Canal with several vessels being attacked over the weekend, leaving no choice but to turn around and retreat from the canal. These attacks continued today with the M/V Swan Atlantic, a Norwegian vessel being hit by a suspected Houthi drone.

Several companies including MSC, Maersk, and Hapag-Lloyd have announced that they will be sailing around the Cape of Good Hope in South Africa. Be prepared for delays of several days, at minimum, for most containers as the companies announced make up nearly half of the global shipping market and 15% of all world shipping traffic typically transits through the canal. For an example of the expected delay, the typical transit time from China to the Netherlands around the Cape is nearly 30 days.

In addition to shipping companies, B.P, the major oil company has also paused transits through the Suez, which may continue to spread to other types of energy shipments. Prices are expected to rise for container shipments as well as oil, quickly and in the coming days.

If you would like to speak with an expert regarding the potential impact to your cargo, please contact us!

Shapiro will continue to monitor the situation and provide status updates as they become available.