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A continuous Israel-Hamas conflict is growing airfreight shipping due to delays in the Suez Canal. Over the last few months, tensions between the parties have escalated with an attack on Gaza in October of 2023. Cargo that has to pass through the Red Sea, in particular, has felt the effects of the war. The Red Sea is a significant passageway, with nearly 10% of the world’s freight passing yearly. Shippers have recently begun looking at alternate solutions, like redirecting shipments to navigate the conflict. Along with rerouting shipments to safer locations like the Horn of Africa, shippers are looking at air as an alternative.
Businesses and shippers are seeing no end to the Gaza war and are seeing an impact on cargo movement. Delays and potential danger may result in a surge in air shipping because of the benefits of this conveyance method. Rerouting ocean shipments to locations like the Cape of Good Hope adds up to 14 days to the journey. Congestion from the number of carriers redirecting further may increase shipping times. Using an air carrier can reduce the transport time to nearly one or two days. This is especially crucial for importers and exporters who must move time-sensitive goods for sales or production requirements.
Along with the crisis in the Red Sea, other situations are leading to a growth in air shipping. A growing shortage in container ships is happening at a time when China’s New Year is closely looming. The Chinese New Year is a peak season when significant goods pass through the Red Sea. Meanwhile, a record drought in the Panama Canal is further increasing traffic in the Suez Canal. The sizable traffic further pushes shippers to look for alternatives like air carriers to move their cargo. With nearly 3% of global trade done by air, a high demand can soon raise the percentage.
Despite the majority of the war happening around near Israel, international shipping could start feeling the backlash. Nearly 12% of the world’s trade, including 30% of containers, passes through the Suez Canal. Carrier companies have already increased shipment rates moving through the Suez Canal. A major international carrier company has recently indefinably suspended operations in the canal, causing container spot rates to surge. Prices for shipping crude oil have also been rising. The impact on U.S. shipping may be minor relative to China and Asia. As the war persists, risks to global cargo movement could continue to grow.
Another concern is that the conflict may expand to other countries like Lebanon. Last month, Houthi militants in Yemen attacked several containerships passing through the Red Sea in the span of several days. While disruptions can be adverse when importing/exporting, they should not stop you or your company from moving freight. The shipper should, however, take better precautions to prevent delays and other scenarios from happening. Having a 3PL provider like A1 Worldwide Logistics coordinate your shipment is an ideal way to navigate potential disruptions. Contact us at 305-821-8995 for assistance in transporting cargo internationally. We have various methods of conveyances like air, sea, and land to guarantee that you meet your shipping goals.
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