News & Blog

March 2024:

The escalation of geopolitical tensions and conflicts in the Red Sea region has raised significant apprehensions regarding the use of the Red Sea for freight. In response, we are opting to maintain our reliance on the Cape of Good Hope (South Africa) route instead of the Suez Canal.  

The disruptions in the Red Sea are causing significant setbacks for global trade and project completion to name a few. As a result, our product shipments from the West are experiencing delays of approximately forty days currently. We are working closely with our trade partners to minimize the impact of these delays through an open dialogue with all stakeholders involved.

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February 2024:

Recent attacks on ships in the Red Sea have caused a considerable amount of challenges for global shipping and trade routes across the world. Major shipping lines like Hapag-Lloyd, CMA-CGM, Maersk, and MSC are avoiding the Red Sea completely, opting for longer routes around the Cape of Good Hope instead of the Suez Canal. This has caused many direct and indirect consequences to the delivery of projects in the region.

Impact on Cost:

This change of shipping routes not only causes delays on projects but also shifts the cost of delivering a project. Longer routes equate to less access to ships and containers, creating a higher demand and lower supply. The result of which is seeing prices of freight rise dramatically. Higher costs are reducing the validity of open quotes/proposals from 90 days to 30 days or less, putting added pressure on customer decision making in a buoyant market.

Operational Challenges:

Longer routes equate to reduced frequency of ships moving cargo in the same period of time, which has also reduced the number of empty containers being made available for the return journey. While the products may be ready at the factory, acquiring a container for freight is as much of a challenge as booking the ship to carry the goods. We have a very experienced team and freight partners working round the clock to reduce this impact, however we are seeing a repeat of 2021-2022 conditions playing out at present.

Production Delays:

With end products taking 4-5 weeks additional to reach their destination, raw materials suffer the same fate. If the Red Sea conditions persist through Q1, we will see production delays from our brand partners due to the lack of raw material availability, which will only compound the issue. Understanding the knock on effect is key to better project planning and arriving at more realistic dates for project deadlines.

The Red Sea disruptions are a big challenge for global trade, but by staying informed and working together, we can minimize the impact experienced across all stakeholders on the project.

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