MONTREAL — Canadian shippers are starting to feel the strain of recent attacks on cargo vessels in the Red Sea, as container rates rise and boats roll in late on the East Coast.
Data from the Port of Halifax shows that 57 of the 87 ships (barely two-thirds) expected to dock at the port over the next four weeks are now expected to arrive at the terminal at least one day late, and some more than two days late. Weeks late.
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According to research firm Drewry, the average value of shipping boxes has doubled since mid-December, when Houthi militants in Yemen stepped up attacks on advertising ships to protest the Israeli army’s crusade in the Gaza Strip.
On Friday, the U. S. carried out airstrikes against Houthi rebels as part of a backlash that included planning by the Canadian Armed Forces. Houthi fighters fired a missile that hit a U. S. shipment on Monday, less than a day after the same organization introduced an anti-shipment measure. cruise missile against a U. S. destroyer in the Red Sea.
The scale of the conflict has led major container carriers to take the direction through the Suez Canal, opting instead for a direction around the African Cape of Good Hope, which can extend transit times by one to two weeks and lead to fuel, equipment and insurance costs. . .
“The shipping industry globally is being impacted by the situation in the Red Sea, and we are beginning to see some delays as shipping lines employ alternate routings around Africa,” said Paul MacIsaac, senior vice-president at the Port of Halifax, in a statement. The maritime gateway is the second-largest port in Eastern Canada, handling everything from exported frozen vegetables to clothing imports from Southeast Asia.
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The director of the Canadian Shipping Federation, Chris Hall, says the delays have left importers struggling, as stocks are stranded in the direction of Canadian shores and platforms.
“The number of hijacked ships is staggering,” more than 350, according to shipping giant Kuehne Nagel. “This substitution adds time and burden to the final product,” said Hall, whose organization represents corporations such as Canadian Tire Corporation and Home Depot Canada. and the Hudson’s Bay Company.
“Somebody has to pick that up.”
But experts cautioned against overestimating the impact, as schedules at the Port of Montreal and the West Coast remain largely unchanged so far.
“Since the Red Sea/Suez Canal is an industrial direction that largely serves Europe and the east coast of North America, the length of transpacific transit is not expected to be affected by the current situation,” said Alex Munro, spokesman for the Port Authority of Vancouver Fraser.
Potential ripple effects may still occur, especially in shipping prices, or may have already occurred.
Tariffs on shipping from East Asia to the U. S. West Coast rose 56% month-over-month on Thursday, according to transportation analytics firm Xeneta.
But overcapacity in the sector means shippers can adapt to longer shipping times and rates will likely stabilize well below pandemic highs, according to the Global Shippers Forum, which represents shipping owners.
“There is no chronic shortage of transportation capacity as was the case during the COVID pandemic, and significant new capacity is expected to be delivered in the first part of 2024,” the organization said in an update to members on Friday.
Longer routes mean ports will have to make a “one-time” replacement of their schedules over the next few weeks, but service patterns return to predictability afterward, he said.
Shippers facing contract renewals amid climbing costs can include provisions to pay less once spot rates drop again, the group said.
At the same time, according to experts, the demand for onboard boarding surface remains strong or is declining.
“There’s peak inflation, the COVID hangover, and other people were spending all their CERB money on big-screen TVs; they didn’t want another one,” said John Corey, who heads the Transport Management Association of Canada. The West Coast fell about nine percent last year, he said.
However, a drought in Central America has further amplified the impact of the Red Sea Forbidden Zone.
The drought has depleted the Panama Canal’s water, which is used to raise and lower ships in a dozen locks, prompting the government to determine the number of ships they let through the waterway.
Fewer slots have boosted tolls and caused bottlenecks at the critical trade conduit between the Atlantic and Pacific Oceans and pushed some oil tankers and container ships to steer clear by taking longer, costlier routes — typically via the Suez Canal, which carries roughly a third of global container traffic.
Today, the Red Sea crisis is driving up those shipping costs. Since mid-December, rates have risen 153 percent for the transport of goods shipped from East Asia to northern Europe, according to Xeneta.
“I would say it’s a cumulative effect,” said Bob Ballantyne, an adviser to the Canadian Shipping Federation.
Aside from delays in the arrival of goods, problems in both channels are likely not immediate for Canadians.
“I think it’s going to take longer to get to Canada,” said the federation’s John Corey.
“But so it shall be; That’s how it will be. “
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