In recent times, the Red Sea has become the most focused. Yemen's Houthi rebels' frequent attacks on merchant ships "linked to Israel" in the Red Sea region have not only forced many shipping giants around the world to divert their routes, but also raised concerns about international shipping and the stability of the global ** chain. How important are the Red Sea shipping lanes?What will be the impact on the global economy?
First of all, we need to understand that the Red Sea crisis is a global economic storm. Its impact is not only economic, but also social and psychological. On the one hand, globalization has promoted the rapid development of the world economy, and on the other hand, globalization has greatly increased the speed and influence of economic crises.
Take a detour to the Cape of Good Hope
International giants suspend Red Sea routes
The Red Sea is located between northeast Africa and the Arabian Peninsula, connecting the Mediterranean Sea to the north through the Suez Canal and the Gulf of Aden through the Bab el-Mandeb Strait to the south.
Now, a global shipping crisis is unfolding on the ground. Due to the Houthi intensive attacks on a number of merchant ships passing through the Bab el-Mandeb Strait in the Red Sea to Israel, from December 15 to 16 local time, many shipping giants around the world, including the Swiss Mediterranean, Denmark's Maersk, France's CMA CGM, and Germany's Hapag-Lloyd, announced their avoidance of the Red Sea route. On the 18th, energy giants such as BP also pressed the "pause button" on the Red Sea tanker transportation.
On December 20, the reporter learned from the world's largest shipping forwarder Dexun Group that some ships of many shipping companies have chosen to detour to the Cape of Good Hope, including Mediterranean Shipping, Maersk, COSCO Shipping, Orient Overseas Shipping, Hapag-Lloyd, CMA CGM, ONE, Hyundai Merchant Marine, Wanhai, Yang Ming Shipping, Nile Shipping, American ** Steamship, etc.
Some freight forwarding companies told reporters on the 20th that in the past two days, they have received notices from customers from shipping companies including Hapag-Lloyd and Evergreen Shipping, announcing that they will change from the original suspension of Red Sea navigation to a bypass to the Cape of Good Hope.
On the 20th, Maersk, the world's second-largest shipping company, told reporters that for safety reasons, all ships that had previously suspended sailing and passed through the Red Sea region will now go around Africa via the Cape of Good Hope. These vessels will continue to sail on the detour route, subject to actual operational feasibility. Maersk will contact affected customers to provide additional details.
As of Dec. 18, about 20 ships from Maersk had suspended transit through the region, half of which were waiting east of the Gulf of Aden and the rest in the Red Sea south of Suez or the Mediterranean Sea north of Suez.
Evergreen Shipping notified on December 20 that based on the safety inspection of goods, ships and crews, Evergreen Shipping will temporarily suspend the acceptance of Israeli goods and suspend the passage of the Red Sea from now on. Ships on the Red Sea regional route will sail to the surrounding safe waters to wait for notice, and whether to adjust the port call will be evaluated according to the subsequent development of the situationVessels on Asia-to-Mediterranean, Europe and the East Coast of the United States, which were originally scheduled to sail through the Red Sea, will be diverted to the Cape of Good Hope at the southern tip of Africa to their destinations.
Hapag-Lloyd also said that the situation around the Suez Canal in the Red Sea is insecure and the crew on board is at great risk, so it was immediately decided to avoid the Suez Canal and the Red Sea, to circumnavigate the ship to the Cape of Good Hope, and the situation in the Red Sea will be reassessed periodically.
As the situation in the Red Sea remains unstable, it is expected that more and more ships of shipping companies will join the "detour" team.
Freight rates have been increased
Bright month** has doubled at the beginning of January compared to the end of December
The best option for international shipping companies that have suspended the Red Sea route is to take the route through the Cape of Good Hope, the southernmost point of Africa.
According to the energy intelligence agency Vortexa, if merchant ships seek alternative routes, such as a detour to the Cape of Good Hope in Africa, the transit time of the main routes from the Middle East to Europe and from India to Europe will increase by 58 to 129 percent. Among them, the largest increase in the time it takes for cargo to reach its destination was on the Middle East Gulf to Mediterranean route, with an increase of 129%, from 17 days to 39 days.
CITIC** also pointed out that the diversion of cargo ships will increase the transit time from the Far East to Northwest Europe by about 9 days, increase the time of a voyage by about 18 days, and reduce the turnover efficiency of ships by about 19%.
However, with the detour plan, the transportation distance and transportation market of ships have increased significantly, and the turnover efficiency of ships has decreased, resulting in a shortage of capacity on Asia-Europe routes in the short term.
Based on this, shipping companies have announced surcharges, and global shipping companies such as Maersk, MSC, CMA CGM and Hapag-Lloyd have all said that they will impose additional fees on ships that change routes due to the Red Sea vessel attack, including Transport Interruption Surcharge (TDS), Red Sea Surcharge (RSC), Emergency Operating Surcharge (EOS), Operation Recovery Surcharge (OCR), Peak Season Surcharge (PSS), etc.
Maersk said it expects to pay a total of $700 additional for a 20ft standard container shipped from China to Northern Europe, including $200 for TDS and $500 for PSS, and $500 for each standard container shipped to the East Coast of North America, which includes $200 for TDS payment and $300 for PSS.
Recently, a number of freight forwarding companies told reporters that they have received a number of shipping companies to update the spot market freight report, in early January next year, a number of European routes and Mediterranean routes freight rates, compared with the end of December has doubled.
In addition, those vessels that still sail through the Red Sea will also need to be insured more expensively. It is understood that the insurance market estimates that the relevant war risk rate has increased from 007%** to 01% to 02%。The increase in multiple costs such as time, fuel, insurance, etc., will inevitably lead to freight costs**. Xia Haofei, the founder of Jian Yiyun, told reporters that the result of the preliminary communication between the class and the company was that the freight rate of the European route rose from $1,500 to $3,500 containers in mid-January.
In addition, MSC, the world's largest carrier, announced that it will increase the freight rate to $5,000 containers on the Mediterranean route from January 1, 2024. Industry insiders believe that this shows that the market has a strong expectation of shipping costs, and some industry analysts such as Xeneta even believe that the freight rate of the Asia-Europe route may be 100%.
At the same time as freight***, energy** is also rising.
Currently, about one-fifth of the volume transported through the Suez Canal is oil, either by ship or via the Sumaid pipeline to Egypt, and the total volume of ** and refined oil products transported by both modes is close to 9 million barrels per day, or about 12% of the total seaborne **. Recently, as the situation in the Red Sea heats up, European natural gas, which has fallen for more than a year, has appeared, and European natural gas has been 13% at one timeInternational oil prices, which have fallen for two consecutive months, have also begun to appear**.
The cost of food and clothing is increasing
Global inflation "has no respite".
It is worth noting that the situation in the Red Sea has also triggered a series of spillover effects.
The Red Sea is one of the important shipping routes connecting Asia and Europe, and many commodities, such as oil, natural gas, chemical products, metal ores, grains, etc., are transported through this shipping lane. Therefore, the Red Sea shipping security incident will also have a certain impact on the transportation and ** of some commodities.
Taking the electric vehicle transportation industry as an example, there are ** reports that in view of the heightened tensions in the Red Sea, Tesla electric vehicles have chosen an alternative route for sea transportation from China to Europe, that is, a detour to the Cape of Good Hope. It is reported that with the extension of the route, the transportation cost of electric vehicles will increase by about 20%. Xia Haofei said that from the perspective of China's exports to Europe, in addition to new energy vehicles, there are a large part of electronic products, clothing, toys and other goods, the added value of these commodities is not high, so there is a high probability that they will still choose to take a detour.
In addition, if tensions in the Red Sea do not improve, India may consider opening an alternative route along Africa to transport basmati rice (also known as basmati rice), which could cost about 15 to 20 percent, according to a source quoted by **. It is reported that this route may also affect India's export of long-grain rice to Egypt and Europe.
Finally, almost all of the above changes will be reflected in the cost of food and clothing, and global inflation "has no respite".
At a time when the world's major central banks are considering resuming monetary policy normalization, the sudden disruption of the global ** chain brings uncertainty. There are comments that if the disruption to shipping is only short-lived, consumers may not feel it noticeably except for petrol **slightly**. If this situation persists for a longer period of time, inflation could rise again in the first month of 2024.
Finally, the impact of the Red Sea crisis on the global economy is two-sided. On the one hand, it has had a huge impact on the global economy, leaving the economies of many countries in a difficult situation. On the other hand, it also provides an opportunity for the transformation and upgrading of the global economy. Only by seizing this opportunity can we see hope in the crisis and find opportunities in the challenges.
Overall, the impact of the Red Sea crisis on the global economy is far-reaching and two-sided. We must not only see its negative effects, but also its positive significance. Only in this way can we better meet the challenges of the future and grasp the opportunities of the future.