Red Sea attacks already bigger issue for supply chain than pandemic, maritime advisory warns

A leading ocean supply chain advisory firm is warning that the disruptions to shipping from the Houthi rebel attacks in the Red Sea are already more damaging to the supply chain impact than the early Covid-19 pandemic.

Sea-Intelligence analyzed current vessel delays compared to delays over the last several years in a report for clients. The data shows that the longer transit around the Cape of Good Hope as ships divert from the Red Sea is already having a more significant impact on vessels available to pick up containers at ports than during the pandemic. This supply chain measure is known in the industry as “vessel capacity.”

The vessel capacity drop is the second largest in recent years, according to Alan Murphy, CEO of Sea-Intelligence. The only single event with a bigger impact than the Red Sea crisis was the “Ever Given,” the giant cargo ship which got stuck in the Suez Canal for six days during March 2021

Sea-Intelligence, along with other maritime officials, estimate there is approximately 10% of the world’s fleet currently not in service. If additional vessels were deployed, it could correct the imbalance in vessel availability and increase certainty in vessel schedules.

“To go around the Cape of Good Hope, ocean carriers need one or two additional vessels to offset the delays,” Murphy said. “Ocean carriers are going to need to add vessels.”

“Threats to Red Sea shipping are a threat to maritime commerce worldwide,” said Steve Lamar, CEO of the American Apparel and Footwear Association. “Delays and cost increases are mounting. Although companies are exploring alternative shipping options, adverse knock-on effects continuing to disrupt logistics globally. More needs to be done to ensure the safety of crews and security of cargo by eliminating existing or future threats entirely.”

Honour Lane Shipping estimated this week that despite U.S. counterattacks against the Houthis, the rebel groups attacks in the Red Sea could last from six months to a year.

The Houthis have continued with attacks on international shipping, targeting U.S.-owned bulk vessels in recent days. A Greece-based bulk vessel was also attacked this week.